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As you can tell from the financial statements, 2014 was an especially busy year.

ID: 2473242 • Letter: A

Question

  

   As you can tell from the financial statements, 2014 was an especially busy year. Tony and Suzie were able to use the $1.39 million received from the issuance of 99,000 shares of stock and hire a construction company for $1 million to build the cabins, dining facilities, ropes course, and the outdoor swimming pool. They even put in a baby pool to celebrate the birth of their firstborn son, little Venture Matheson.

6.

value:
10.00 points

Required information

Calculate the following risk ratios for 2014. (Use 365 days in a year. Do not round intermediate calculations. Round your answers to 1 decimal place. Omit the "%" sign in your response.)

7.

value:
10.00 points

Required information

Income statement and balance sheet data for Great Adventures, Inc., are provided below.

Explanation / Answer

Risk ratio:

Debt to Capital = Total Debt / Total Capital

= 567,165 / 2,201,444

0.26

Debt to equity = Total Debt / Total equity

= 567,165 / 1,561,709

0.36

Time interest earned

= Income before interest and tax / interest expense

= 293,924/33615

= 8.74

Profitability raitos

Gross profit = gross profit/ sales

= 626,500/ 696000

= 90%

Return on assets

= net income/ total assets

= 203,509/2,201,444

= 9.24%

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