The following financial information regarding Foshee Flapjacks is available:

Required
Compute the following ratios: debt to assets, debt to equity, and times interest earned. Discuss the solvency of Foshee Flapjacks. Does the company rely more on equity or debt to finance its operations?

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2012 Balance Sheet Total assets Total liabilities Total stockholders' equity $530,000 140,000 390,000 2012 Income Statement Sales Cost of goods sold Operating expenses Interest expense Income tax expense Gross profit Operating income Income before taxes $250,000 125,000 S125,000 40,000 85,000 10,000 75,000 25,000 50,000 Net income