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The balance sheet for Shaver Corporation reported the following: cash, $6,000; short-term investments, $11,000; net accounts receivable, $37,000; inventory, $42,000; prepaids, $11,000; equipment, $108,000;
The balance sheet for Shaver Corporation reported the following: cash, $6,000; short-term investments, $11,000; net accounts receivable, $37,000; inventory, $42,000; prepaids, $11,000; equipment, $108,000; current liabilities, $42,000; notes payable (long-term), $72,000; total stockholders' equity, $101,000; net income, $3,520; interest expense, $4,800; income before income taxes, $5,880. Required: 1. Compute Shaver's debt-to-assets ratio and times interest earned ratio. 2-a. Based on these ratios, does it appear Shaver relies mainly on debt or equity to finance its assets? 2-b. Is it probable that Shaver will be able to meet its future interest obligations? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 Compute Shaver's debt-to-assets ratio and times interest earned ratio. (Round your answers to 2 decimal place Debt-to-Assets Times Interest Earned Ratio Ratio
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