Respuesta :
Answer:
Debt/assets ratio = 0.575
TIER = 1.27 TIMES
Explanation:
The debt/asset ratio measures the proportion of debt to assets available to an organization.
The formula for calculating debt-to-assets is as follows:
Debt/assets ratio: Total Debt÷Total Assets
Lets add up total debts and total assets respectively and then divide them to get debt/assets ratio.
Total debts include, current liabilities, notes payable.
Total assets include, cash, net accounts receivable, inventories, prepaid, equipment.
Total debts = $47000+$77000
TD = $124000
Total Assets = $8500+$13500+$42000+$47000+$3500+$101000
TA = $215500
Debt/assets ratio = $124000÷$215500
Debt/assets ratio = 0.575
The interest cover/times interest earned ratio measures the number of times earnings before interest and tax covers the interest expense if they fall due.
Times interest earned ratio is calculated as follows;
Times interest earned ratio = EBIT ÷ INTEREST EXPENSE
TIER = $7380÷$5800
TIER = 1.27 TIMES
This means if interest expenses fall due the entity is able to pay them off 1.27 times.
Answer:
1. Debt-to-assets ratio = Total debts/Total assets x 100
Debt-to-assets ratio = $124,000/$225,500 x 100
Debt-to-assets ratio = 54.99%
Total debts = $47,000 + $77,000 =$124,000
Total assets = $8,500 + $13,500 + $42,000 + 47,000 +$13.500 + $101,000
Total assets = $225,500
2. Times interest earned
= Earnings before interest and tax/Interest expense
= $7,380/$5,800
= 1.3 times
Explanation:
Debt-to-assets ratio is the ratio of total debts to total assets while times interest earned is the ratio of income before interest and tax to interest expense.
