Question

Waterway Corporation Balance Sheet December 31
		2018		2017
Cash		$19,500		$14,400
Accounts Receivable		29,300		19,900
Inventory		14,900		10,100
Total Current Assets		63,700		44,400
Property, Plant & Equipment		78,100		68,100
Total Assets		$141,800		$112,500
Accounts Payable		$20,800		$9,600
Unearned Revenue		14,900		9,500
Note Payable (due 2021)		49,900		49,900
Total Liabilities		85,600		69,000
Common Shares		19,200		19,200
Retained Earnings		37,000		24,300
Shareholders’ Equity		56,200		43,500
Total Liabilities & Equity		$141,800		$112,500

Waterway Corporation Income Statement For the year ending December 31
		2018		2017
Sales revenue		$255,300		$127,200
Cost of goods sold		155,500		87,700
Gross margin		99,800		39,500
Operating expenses		63,600		24,600
Interest expense		5,200		2,600
Income before income tax		31,000		12,300
Income tax expense		6,200		2,460
Net income		$24,800		$9,840

Debt-to-total assets.

2018:

2017:

Answer 1

Debt-to-total assets ( 2018 ) = Total liabilities / Total assets = $85,600 / $141,800 = 60.37%

Debt-to-total assets ( 2017 ) = Total liabilities / Total assets = $69,000 / $112,500 = 61.33%