Carl Perkins Products presented the following financial information: December 31 Year 2 Year 1 $ 11,200...

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Carl Perkins Products presented the following financial information: December 31 Year 2 Year 1 $ 11,200 $ 11,750 14,350 Cash Accounts receivable 12,450 21,150 88,600 21,000 Inventory Equipment Accumulated depreciation 84,250 (22,800) $113.050 (21,250) $107.650 Total assets $ 13,650 $ 18,950 7,950 Accounts payable Dividends payable Salaries gayable Income taxes payable Long-term notes payable 6,150 2,300 1,300 6,800 21,000 24,850 26,800 7,000 21,500 32,050 30,400 $113.050 Common stock Retained earnings Total liabilities & equity $107.650 Carl Perkins Products operating income for Year 2 totaled $6,500. Net income totaled $3,200 and interest expense was $429. Evaluate the financial risk of Carl Perkins Products using the Long-term Debt to Equity ratio and the Interest Coverage ratio from the financial information provided. Indicate whether you believe that a bank would find this company to be a lending risk. Carl Perkins Products presented the following financial information: December 31 Year 2 Year 1 $ 11,200 $ 11,750 14,350 Cash Accounts receivable 12,450 21,150 88,600 21,000 Inventory Equipment Accumulated depreciation 84,250 (22,800) $113.050 (21,250) $107.650 Total assets $ 13,650 $ 18,950 7,950 Accounts payable Dividends payable Salaries gayable Income taxes payable Long-term notes payable 6,150 2,300 1,300 6,800 21,000 24,850 26,800 7,000 21,500 32,050 30,400 $113.050 Common stock Retained earnings Total liabilities & equity $107.650 Carl Perkins Products operating income for Year 2 totaled $6,500. Net income totaled $3,200 and interest expense was $429. Evaluate the financial risk of Carl Perkins Products using the Long-term Debt to Equity ratio and the Interest Coverage ratio from the financial information provided. Indicate whether you believe that a bank would find this company to be a lending risk.

Answer rating: 100% (QA)

Long term Debt Equity ratio Long term Debt Total Equity Year 2 Year 1 Long term Notes payable 2150... View the full answer