Hoosier Buddy Marina provided the following income statement for last year: Sales .....................$11,300,000 Cost of goods sold

Question:

Hoosier Buddy Marina provided the following income statement for last year:

Sales .....................$11,300,000

Cost of goods sold ................3,000,000

Gross margin ..................$ 8,300,000

Operating expenses ..................3,800,000

Operating income ..................$ 4,500,000

Interest expense ..................1,000,000

Net income before taxes ..............$ 3,500,000

Income taxes ....................1,400,000

Net income ....................$ 2,100,000

Hoosier’s balance sheet as of December 31 last year showed total liabilities of $10,250,000, total equity of $6,150,000, and total assets of $16,400,000.

Required:

Round answers to two decimal places.

1. Calculate the times-interest-earned ratio.

2. Calculate the debt ratio.

3. Calculate the debt-to-equity ratio.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...