Financial Statements for Narlock Company Appear Below -Narlock Company's Debt-To-Equity Ratio at the End of Year 2

question 27

Multiple Choice

Financial statements for Narlock Company appear below:

$\begin{array}{|l|r|}\hline&\text {Larned Company } \\&\text { Income Statement } \\&\text { For the Year Ended December 31, Year } \\&2\\&\text { (dollars in thousands) }\\\hline\text { Sales (All on Account) } & \$ 2250 \\\hline \text { Costs of Goods Sold } & \$ 1570 \\\hline \text { Gross Margin } & \$ 680 \\\hline \text { Operating Expenses } & \$ 270 \\\hline \text { Net Operating Income } & \$ 410 \\\hline \text { Interest Expense } & \$ 50 \\\hline \text { Net Income before Taxes } & \$ 360 \\\hline \text { Income Taxes (30\%) } & \$ 108 \\\hline \text { Net Income } & \$ 252 \\\hline\end{array}$

-Narlock Company's debt-to-equity ratio at the end of Year 2 was closest to which of the following?

• A) 0.32 to 1.
• B) 0.38 to 1.
• C) 0.70 to 1.
• D) 1.09 to 1.

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Definitions:

Ancestors

Biological or cultural forebears of individuals or groups, often referenced in the context of genetics, evolution, or heritage.

Self-determination

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