Question: Use the financial statements of AJ Cardenas Inc in S13 6

Use the financial statements of AJ Cardenas, Inc., in S13-6 and S13-7.
In S13-6, Use the AJ Cardenas, Inc., balance sheet data on the shown below.

1. Compute the company’s debt ratio at December 31, 2014.
2. Compute the company’s times-interest-earned ratio for 2014. For operating income, use income before both interest expense and income taxes. You can simply add interest expense back to income before taxes.
3. Is AJ Cardenas’s ability to pay liabilities and interest expense strong or weak? Comment on the value of each ratio computed for questions 1 and 2.

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  • CreatedJuly 25, 2014
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