For each year (2019 and 2018) compute Times interest earned Debt ratio Debt/equity ratio Debt to...

For each year (2019 and 2018) compute

Times interest earned

Debt ratio

Debt/equity ratio

Debt to tangible net worth ratio

Balance Sheet
	(in thousands)
	2019	2018
Current assets	$ 449,195	$ 433,049
Investments	32,822	55,072
Deferred charges	4,905	12,769
Property, plant, and equipment, net	350,921	403,128
Trademarks and leaseholds	45,031	47,004
Excess of cost over fair market value of net
assets acquired	272,146	276,639
Assets held for disposal	6,062	10,247
	$1,161,082	$1,237,908

Total liabilities	$ 689,535	$ 721,149
Total stockholders' equity	471,547	516,759
	$1,161,082	$1,237,908

Income Statement
Net sales	$2,020,526	$1,841,738
Cost of goods sold	(2,018,436)	(1,787,126)
Selling and administrative	(300,000)	(250,000)
Interest expense	(40,000)	(30,000)
Net income (loss)	$ (337,910)	$ (225,388)

Solutions

Expert Solution

Debt Ratio:

Year	Total liabilities	/	Total Assets	=	Debt Ratio
2019	$689,535	/	$1,161,082	=	0.5939
2018	$721,149	/	$1,237,908	=	0.5826

Debt/Equity Ratio:

Year	Total liabilities	/	Total Stockholders' Equity	=	Debt/Equity ratio
2019	$689,535	/	$471,547	=	1.462
2018	$721,149	/	$516,759	=	1.396

Debt to tangible networth ratio:

Year	Total liabilities	/	[Total Stockholders' Equity - Intangible assets]	=	Debt/Equity ratio
2019	$689,535	/	$426,516 [$471,547-$45,031]	=	1.617
2018	$721,149	/	$469,755 [$516,759-$47,004]	=	1.535

ekkarill92 answered 1 year ago

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