Refer to the Following Selected Financial Information from Shakley's Incorporated

question 169

Multiple Choice

Refer to the following selected financial information from Shakley's Incorporated. Compute the company's debt-to-equity ratio for Year 2. $$\begin{array} { | l | r | r | } \hline & { \text { Year 2 } } & { \text { Year 1 } } \\\hline \text { Net sales } & \$ 478,500 & \$ 426,250 \\\hline \text { Cost of goods sold } & 276,300 & 250,120 \\\hline \text { Interest expense } & 9,700 & 10,700 \\\hline \text { Net income before tax } & 67,250 & 52,680 \\\hline \text { Net income after tax } & 46,050 & 39,900 \\\hline \text { Total assets } & 317,100 & 288,000 \\\hline \text { Total liabilities } & 181,400 & 167,300 \\\hline \text { Total equity } & 135,700 & 120,700 \\\hline\end{array}$$

• A) 0.75.
• B) 2.63.
• C) 2.34.
• D) 1.34.
• E) 1.75.

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