in thousands) $5,730 Net sales 4,080 Less: Cost of goods sold Less: Depreciation
ID: 2745060 • Letter: I
Question
in thousands) $5,730 Net sales 4,080 Less: Cost of goods sold Less: Depreciation 410 Earnings before interest and taxes 1,240 Less: Interest paid 31 Taxable Income 1,209 Less: Taxes 423 1786 Net income Galaxy United, Inc. 2008 and 2009 Balance Sheets in thousands) 2008 2009 65 170 Accounts payable Cash Accounts rec. 990 830 Long-term debt 1,520 1,960 Inventory Common stock Retained earnings $2,575 $2,960 Tota 3,340 Net fixed assets 3,530 6305 300 Total assets Total liab. & equity What is the debt-equity ratio for 2009? O .46 O .27 O .24 O .47 O .39 2008 2009 $1,350 $1,250 730 520 $3,314 $3,095 930 1,216 $6105 $6,300Explanation / Answer
Ans) Debt Equity ratio = Total Liabilities / Total Equity
Total Liabilities = Accounts payable + Long term debt = $1,250 + $520 = $1,770
Total Equity = Common stock + Retained earnings = $3,314 + $1,216 = $4,530
Debt Equity ratio = 1,770 / 4,530 = 0.39
option 5th
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