Question

The classified balance sheet and selected income statement data for Shreve, Inc., as of December 31, 2012, are presented next.


Selected Income Statement Data
Gross Profit ......................................................... $273,500
Operating Expenses ............................................. 152,800
Earnings Before Interest and Taxes ..................... 120,700
Interest Expense .................................................. 16,200
Income Tax Expense ............................................ 32,600
Net Income .......................................................... 7 1,900

Requirements
1. Calculate Shreve, Inc.’s debt ratio and interest coverage ratio as of December 31, 2012. Round to two decimal places.
2. What percentage of Shreve, Inc.’s assets belong to the stockholders?
3. Would you be willing to extend credit to Shreve, Inc.? Why or whynot?


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  • CreatedApril 29, 2014
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