15. value: 10.00 points Problem 10-233 [LO 10O-S1 Consider the following informa

Question

15. value: 10.00 points Problem 10-233 [LO 10O-S1 Consider the following information Gil's Fish and Tackle, Inc. Balance Sheet At December 31, 2016 Assets Cash Accounts Receivable (less allowance) Inventories Property, Plant and Equipment Long-term Investments S 23,250 170,200 105,150 152,800 80,000 Total Assets $531,400 Liabilities Accounts Payable Current Portion of Long-Term Debt Long-Term Notes Payable $51,700 72,300 113,000 Total Liabilities 237,000 Stockholders' Equity Contributed Capital Retained Eanings 200,000 94,400 Total Stockholders' Equity 294,400 Total Liabilities and Stockholders' Equity $531,400

Explanation / Answer

Debt to Asset ratio = Debt / Total Assets

Debt = Accounts payable + Long term debt +Long term notes payable = 51700+72300+113000 = 237000

Total Assets = 531400

Debt to Asset ratio = [237000/531400]*100 = 44.60%

Times Earned ratio = Earnings before Interest and Tax [EBIT]/ Interest expense

EBIT = 365900

Interest expense = 16950

Times Earned ratio = 365900/16950 = 21.59 times

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