I need help answering these question parts, please! ( Type ypur answer up so it

Question

I need help answering these question parts, please! ( Type ypur answer up so it becomes more clear for me, please) Thank you value 222 points M10-13 Computing the Debt-to-Assets Ratio and the Times Interest Earned Ratio [LO 10-5] The balance sheet for Shaver Corporation reported the following: cash, $7,000; short-term investments $12,000; net accounts receivable, $39,000, inventory, $44,000; prepaids, $12,000, equipment, $116,000; current liabilities, $44,000; notes payable (long-term), $74,000; total stockholders' equity, $130,000; net income, $3,720, interest expense, $5,200, income before income taxes, $6,480 1. Compute Shaver's debt-to-assets ratio and times interest earned ratio. (Round your answers to 2 decimal places.) Ratio Debt-to-Assets Times Interest Earned

Explanation / Answer

Total assets=Cash+Short term investments+AR+Inventory+Prepaids+Equipment

=(7000+12000+39000+44000+12000+116000)=$230000

Total debt=Current liabilties+Notes payable

=(44000+74000)=$118000

1.Debt ratio=Total debt/Total assets

=(118000/230000)=0.51(Approx).

2.

Times interest earned=EBIT/interest

=(11680/5200)=2.25 (Approx).

EBIT(balance) $11680 Less:interest (5200) EBT $6480

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