The classified balance sheet and selected income statement data for Shreveport Auto, Inc., as of December 31,
Question:
The classified balance sheet and selected income statement data for Shreveport Auto, Inc., as of December 31, 2016, are presented next.
Selected Income Statement Data
"Gross Profit …………………………….. $293,200
Operating Expenses ……….……………... 173,100
Earnings Before Interest and Taxes …...….. 120,100
Interest Expense …………………..…….… 17,500
Income Tax Expense ……………...……….. 27,400
Net Income ……………………..…………. 75,200"
Requirements
1. Calculate Shreveport Auto, Inc.’s debt ratio and interest coverage ratio as of December 31, 2016. Round to two decimal places.
2. What percentage of Shreveport Auto, Inc.’s assets belong to the stockholders?
3. Would you be willing to extend credit to Shreveport Auto, Inc.? Why or why not?
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