Question

The following data were taken from the financial statements of Quality Construction Inc. for December 31, 2008 and 2007:


The income before income tax was $844,800 and $537,600 for the years 2008 and 2007, respectively.
a. Determine the ratio of liabilities to stockholders’ equity at the end of each year. Round to one decimal place.
b. Determine the number of times the bond interest charges are earned during the year for both years. Round to one decimal place.
c. What conclusions can be drawn from these data as to the company’s ability to meet its currently maturingdebts?


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  • CreatedJuly 17, 2012
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