Calculate the Debt-To-Assets Ratio and the Times Interest Earned Ratio

question 45

Essay

Calculate the debt-to-assets ratio and the times interest earned ratio for the following company.
$\begin{array}{c} \hline\text { Gil's Fish and Tackle, Inc.Balance Sheet At December 31,2018 }\\\begin{array}{|l} \hline \text { Assets } & \\ \hline\text { Cash } & \\ \hline \text {Accounts Receivable (less allowance) } & \\ \hline\text { Inventories } & \\\hline \text { Property, Plant, and Equipment} & \\\hline \text { Long-term Investments } & \\ \hline \text {Total Assets } & \\\hline \text {Liabilities } & \\\hline \text { Account Payable} & \\ \hline \text { Current Portion of Long-Term Debt } & \\ \hline \text { Bonds Payable } & \\ \hline \text { Total Liabilities } & \\\hline \text { Shareholders' Equity} & \\ \hline \text {Contributed Capital } & \\\hline \text { Retained Earnings } & \\ \hline\text { Total Equity } & \\ \hline\text { Total Liabilities and Equity} & \\\hline\end{array}\begin{array}{|r|}\hline\\\hline \$ 22,200 \\\hline 169,100 \\\hline 68,300 \\\hline 102,800 \\\hline 30,000 \\\hline \$ 392,400 \\\hline\\\hline \$ 49,200 \\\hline 68,800 \\\hline \underline{100,000} \\\hline \underline{218,000} \\\hline\\\hline 100,000 \\\hline \underline{74,400} \\\hline \underline{174,400} \\\hline \$ 392,400 \\\hline\end{array}\end{array}$

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Definitions:

Stock Split

An action by a corporation to break up its present shares into more shares, aiming to improve the tradability of the shares.

Market Price

The price at present for the exchange of an asset or service on the open market.

Paid In Surplus

The amount of money paid by investors for shares above their nominal value during the issuance of shares, reflecting the additional equity capital that is not registered as share capital.

Stock Split

An action by a company to divide its existing shares into multiple shares to boost the liquidity of the shares.