Consccudve five-year balance sheets and income ststemen of the Laura Gibson Corporation are shown, below and on the following page.

Required

(a) Compute the foIIowg for the years ended December 2003-2007:

1Times interest earned

2Fixed charge coverage

3Debt ratio

4Debt/Equity ratio

5debt to tangible net worth ratio

b) Comment on the debt position and the trends indicated in the long-term debt-payingg ability.

 

	Laura Gibson Corporation
	Balance sheet
Particulars	2007	2006	2005	2004	2003
Assets
Current Assets
Cash	$ 27,000	$ 26,000	$ 25,800	$ 25,500	$ 25,000
Accounts receivable, net	$ 135,000	$ 132,000	$ 130,000	$ 129,000	$ 128,000
Inventories	$ 128,000	$ 130,000	$ 134,000	$ 132,000	$ 126,000
Total current assets	$ 290,000	$ 288,000	$ 289,800	$ 286,500	$ 279,000
Property plant and equipment, net	$ 250,000	$ 248,000	$ 247,000	$ 246,000	$ 243,000
Intangibles	$ 20,000	$ 18,000	$ 17,000	$ 16,000	$ 15,000
Total assets	$ 560,000	$ 554,000	$ 553,800	$ 548,500	$ 537,000
Iiabilities and stockholders’ equity
Current liabilities
Accounts payable	$ 75,000	$ 76,000	$ 76,500	$ 77,000	$ 78,000
Income taxes	$ 13,000	$ 13,500	$ 14,000	$ 13,000	$ 13,500
Total current liabiilities	$ 88,000	$ 89,500	$ 90,500	$ 90,000	$ 91,500
Long-term debt	$ 170,000	$ 168,000	$ 165,000	$ 164,000	$ 262,000
Total liabilities	$ 258,000	$ 257,500	$ 255,500	$ 254,000	$ 353,500
Stockholders’ equity	$ 302,000	$ 296,500	$ 298,300	$ 294,500	$ 183,500
Total liabilities and stockholders Equity	$ 560,000	$ 554,000	$ 553,800	$ 548,500	$ 537,000
	Laura Gibson Corporation
	Statement of Earnings
	Yea!-s Ended December 31, 2003—2007
Particulars	2007	2006	2005	2004	2003
Net sales	$ 920,000	$ 950,000	$ 910,000	$ 850,000	$ 800,000
Cost of goods sold	$ 640,000	$ 648,000	$ 624,000	$ 580,000	$ 552,000
Gross margin	$ 280,000	$ 302,000	$ 286,000	$ 270,000	$ 248,000
selling and administration expenses	$ 156,000	$ 157,000	$ 154,000	$ 150,000	$ 147,000
Earnings Before interest and tax	$ 124,000	$ 145,000	$ 132,000	$ 120,000	$ 101,000
Interest expense	$ 17,000	$ 16,000	$ 15,000	$ 14,500	$ 23,000
Earnings from continuing operations before income taxes	$ 107,000	$ 129,000	$ 117,000	$ 105,500	$ 78,000
income taxes	$ 36,300	$ 43,200	$ 39,800	$ 35,800	$ 26,500
Earnings from continuing operations	$ 70,700	$ 85,800	$ 77,200	$ 69,700	$ 51,500
Discontinued operating earrslngs (loss), net of taxes;
From operations	-1400	1300	1400	1450	1600
On disposal	-900	-	-	-	-
Earnings (loss) from discontinued operation	-2300	1300	1400	1450	1600
Net earnings	$ 68,400	$ 87,100	$ 78,600	$ 71,150	$ 53,100
Earnings (loss) per share:
Continuing operations	$ 1.53	1.69	1.46	1.37	1.25
Discontinued operations	$ (0.03)	0.01	0.01	0.01	0.01
Net earnings per share	$ 1.50	$ 1.70	$ 1.47	$ 1.38	$ 1.26