Task 1

Please use the balance sheet and income statement in the Attachment A to complete the task

Reqired

a. for the year ended December 31, 2018, compute:

1. Times interest earned

2. Debt ratio

3. Debt/equity ratio

4. Debt to tangiable net worth ratio

b. Comment on the results calculated above.

Task 1 BUTA COMPANY Balance Sheet for December 31, 2018 Cash Accounts receivable Inventory Total current assets Property, plant, and equipment net Patents and other intangiable assets Total assets Accounts payable Taxes payable Other current liabilities Total current liabilities Long Term debt Total liabilities Preferred stock Common stock Premium on common stock Retained earnings Total liabilities and stockolders' equity 9 61.500 76.500 129.000 267.000 365.500 30.000 662.500 57.500 26.500 42.000 126.000 120.000 246.000 56.500 100.000 120.000 140.000 662.500 Income Statement for the Year Ended December 31, 2018 Sales 948.000 Cost of sales 672.500 Gross profit 275.500 Operating expenses Selling 63.500 General 44.000 Operating income 168.000 Other items: Interest expense 31.500 Earnings before provision for income tax 136.500 Provision for income tax 54.600 Net Income 81.900