Question 1: Question 2: At April 30, 2013, H. J. Klehr Incorporated reported the

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Question 1:

Question 2:

At April 30, 2013, H. J. Klehr Incorporated reported the following amounts (in millions) in its financial statements 2013 2012 Total Assets Total Liabilities Interest Expense Income Tax Expense Net Income $12,900 9,159 240 280 1,160 $11,700 8,073 240 300 1,080 Required: 1. Compute the debt-to-assets ratio and times interest earned ratio for 2013 and 2012. (Round your answers to 2 decimal places.) 2013 2012 Debt-to-Assets Times Interest Earned Ratio 2-a. Creditors were providing a greater (or lesser) proportion of financing for Klehr Incorporated assets? Greater Lesser 2-b. Klehr Incorporated was more (or less) successful at covering its interest costs, as compared to 2012? More Less

Explanation / Answer

1. debt to assets ratio=total liability/total assets

2. Times interest earned ratio=EBIT/interest

2a greater portion to liability in assets

2b more coverage since earlier it was 6.75 and nw 7times covergae

2013 2012 liabiltiy 9159 8073 assets 12900 11700 debt to assets ratio 9159/12900 8073/11700 71% 69%

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