Ratio of Liabilities to Stockholders Equity and Times Interest Earned The following data were taken from the financial statements of Starr Construction Inc for December 31, 20Y6 and 20Y5 Dec 31, 20Y6 Dec 31, 20Y5 Accounts payable and other liabilities $1,700,000 $2,325,000 Current maturities of bonds payable 500,000 500,000 Serial bonds payable, 8 , issued 2008, due in five years 5,000,000 5,500,000 Common stock, $5 par value 250,000 250,000 Paid in capital in excess of par 1,500,000 1,500,000 Retained earnings 10,250,000 7,500,000 The income before income tax was $2,816,000 and $2,640,000 for the years 20Y6 and 20Y5, respectively a Determine the ratio of liabilities to stockholders' equity at the end of each year Round to one decimal place Dec 31, 20Y6 Dec 31, 20Y5 b Determine the times (bond) interest earned during the year for both years Round to one decimal place Dec 31, 20Y6 Dec 31, 20Y5 c What conclusions can be drawn from these data as to the company's ability to meet its currently maturing debts The company's ability to meet its currently maturing debts has improved during 20Y6 Feedback

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Ratio of Liabilities to Stockholders Equity and Times Interest Earned The following data were taken from the financial statements of Starr Construction Inc. for December

Ratio of Liabilities to Stockholders Equity and Times Interest Earned

The following data were taken from the financial statements of Starr Construction Inc. for December 31, 20Y6 and 20Y5:

	Dec. 31, 20Y6	Dec. 31, 20Y5
Accounts payable and other liabilities	$1,700,000	$2,325,000
Current maturities of bonds payable	500,000	500,000
Serial bonds payable, 8%, issued 2008, due in five years	5,000,000	5,500,000
Common stock, $5 par value	250,000	250,000
Paid-in capital in excess of par	1,500,000	1,500,000
Retained earnings	10,250,000	7,500,000

The income before income tax was $2,816,000 and $2,640,000 for the years 20Y6 and 20Y5, respectively.

a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round to one decimal place.

Dec. 31, 20Y6
Dec. 31, 20Y5

b. Determine the times (bond) interest earned during the year for both years. Round to one decimal place.

Dec. 31, 20Y6
Dec. 31, 20Y5

c. What conclusions can be drawn from these data as to the company's ability to meet its currently maturing debts? The company's ability to meet its currently maturing debts has improved during 20Y6.

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