1.)Times interest earned ratio           2.)Debt ratio           3.)Equity ratio

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter6: Accounting For Financial Management
Section: Chapter Questions
Problem 3P
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The President of Paroy, has asked you to gather some statistics about his Company’s solvency. You have compiled the following data:

Net Income

Income Tax Rate

P 900 000

34%

Total Liabilities

Total Stockholders

2 048 000

Interest Expense

100 000

Equity

4 352 000

REQUIRED: Using these data, calculate:

1.)Times interest earned ratio           2.)Debt ratio           3.)Equity ratio

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