Presented below is information from the annual report of Todd Warner, Inc.
Operating income ............ $850,000
Bond interest expense ........... 305,000
545,000
Income taxes .............. 218,000
Net income .............. $327,000
Bonds payable .............. $3,000,000
Common stock .............. $1,655,000
Retained earnings ............ $856,000

Instructions
Is Todd Warner, Inc. trading on the equity successfully? Explain.