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Question
Consider the following information:
| Gil's Fish and Tackle, Inc. Balance Sheet At December 31, 2016 | |
| Assets | |
| Cash | $ 22,200 |
| Accounts Receivable (less allowance) | 169,100 |
| Inventories | 68,300 |
| Property, Plant and Equipment | 102,800 |
| Long-term Investments | 30,000 |
| Total Assets | $392,400 |
| Liabilities | |
| Accounts Payable | $ 49,200 |
| Current Portion of Long-Term Debt | 68,800 |
| Long-Term Notes Payable | _100,000 |
| Total Liabilities | _218,000 |
| Stockholders' Equity | |
| Contributed Capital | 100,000 |
| Retained Earnings | _ 74,400 |
| Total Stockholders Equity | _174,400 |
| Total Liabilities and Stockholders Equity | $392,400 |
| Gil's Fish and Tackle, Inc. Income Statement For the year ending December 31, 2016 | |
| Sales Revenue | $2,765,000 |
| Operating Expenses | |
| Salaries and Wages Expense | 1,850,500 |
| Operating and Admin. Expenses | 286,700 |
| Depreciation Expense | 335,400 |
| Operating Expenses | 2,472,600 |
| Operating Income | 292,400 |
| Other Expenses | |
| Interest Expense | _ _ 17,000 |
| Income Before Income Tax Expense | 275,400 |
| Income Tax Expense | 103,800 |
| Net Income | $ 171,600 |
Required:
Part a. Calculate the debt-to-assets ratio.
Part b. Describe what the debt-to-assets ratio tells you and how to interpret it.
Part c. Calculate the times interest earned.
Part d. Comment on the results of your times interest earned analysis.
Answer
This answer is hidden. It contains 1011 characters.
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