Deacon Corporation has provided the following financial data from its balance sheet and income statement: Year...
Deacon Corporation has provided the following financial data from its balance sheet and income statement:
| Year 2 | Year 1 | |||||
| Total assets | $ | 1,239,000 | $ | 1,198,000 | ||
| Total liabilities | $ | 486,000 | $ | 480,000 | ||
| Total stockholders' equity | $ | 753,000 | $ | 718,000 | ||
| Net operating income (income before interest and taxes) | $ | 69,515 | ||||
| Interest expense | $ | 32,000 | ||||
The company’s times interest earned ratio for Year 2 is closest to:
-
1.17
-
0.67
-
3.17
-
2.17
Homework Answers
times interest earned ratio for Year 2=Earnings before interest and taxes/interest expense
=69515/32000
which is equal to
=2.17(Approx).
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