calculate What is the firm's debt ratio?

Balance Sheet
Current assets
Cash 820,000
Acc receivable not given
Inventories 1,090,000
Fixed assets 3,400,000
TOTAL ASSETS 6,800,000

Current liabilities
Acc payable not given
Long-term debt 2,000,000
Common stock 950,000
Retained earnings 3,390,000
TOTAL LIAB and EQUITY 6,800,000

Income Statement
Sales 20,400,000
Operating expense 16,120,000
EBIT 4,280,000
Interest expense 280,000
EBT 4,000,000
Taxes 1,600,000
Net income 2,400,000

Answer rating: 100% (QA)

The firms debt ratio is calculated by dividing the total liabiliti... View the full answer