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The Following Condensed Income Statement Is for Mason Inc Compute the Following Long-Term Solvency Ratios for 2017,and Provide a \text

question 5

Essay

The following condensed income statement is for Mason Inc.
$\begin{array}{c} \text { Mason Inc. }\\ \text { Income Statement}\\ \text { Years ended December 31, 2017 and 2016}\\ \text { (in thousands)}\\\begin{array}{lcc}&2017&2016\\ \text { Net sales ( } 80 \% \text { are credit sales) } & \$ 60,000 & \$ 46,000 \\ \text { Cost of goods sold } & 26,000 & 20,000 \\ \text { Gross margin } & 34,000 & 26,000 \\ \text { Selling and administrative expenses } & 6,000 & 4,000 \\ \text { Operating income } & 28,000 & 22,000 \\\text { Interest expense } & 1,000 & 1,000 \\\text { Income before taxes } & 27,000 & 21,000 \\ \text { Income tax expense } & 2,000 & 1,000 \\ \text { Net income } & \$ 25,000 &\$ 20,000 \\\end{array}\end{array}$
$The following condensed income statement is for Mason Inc. \begin{array}{c} \text { Mason Inc. }\\ \text { Income Statement}\\ \text { Years ended December 31, 2017 and 2016}\\ \text { (in thousands)}\\\begin{array}{lcc} &2017&2016\\ \text { Net sales ( } 80 \% \text { are credit sales) } & \$ 60,000 & \$ 46,000 \\ \text { Cost of goods sold } & 26,000 & 20,000 \\ \text { Gross margin } & 34,000 & 26,000 \\ \text { Selling and administrative expenses } & 6,000 & 4,000 \\ \text { Operating income } & 28,000 & 22,000 \\ \text { Interest expense } & 1,000 & 1,000 \\ \text { Income before taxes } & 27,000 & 21,000 \\ \text { Income tax expense } & 2,000 & 1,000 \\ \text { Net income } & \$ 25,000 &\$ 20,000 \\ \end{array} \end{array} Compute the following long-term solvency ratios for 2017,and provide a brief explanation after each ratio (round computations to two decimal places): (1)Debt to assets (2)Debt to equity (3)Times interest earned$
Compute the following long-term solvency ratios for 2017,and provide a brief explanation after each ratio (round computations to two decimal places):
(1)Debt to assets
(2)Debt to equity
(3)Times interest earned

Definitions:

Anesthesia Provided

The administration of drugs or substances to reduce or eliminate pain sensation during medical procedures.

Blood Loss

The loss of blood from the circulatory system, which can occur through injury, surgery, or a medical condition.

Hand-Off Report

A communication tool used by healthcare professionals to transfer essential information and responsibility for care of a patient from one caregiver to another.

Ambulatory Surgery

Surgical procedures that do not require an overnight hospital stay, allowing the patient to return home the same day.