Camper Company and McSead, Inc., are the two largest toy companies. Condensed liabilities and stockholders' equity from a recent balance sheet are shown for each company as follows: CamperMcSeadCurrent liabilities$1,778,000 $3,907,000 Long-term debt958,000 2,294,600 Total liabilities$2,736,000 $6,201,600 Total stockholders' equity4,560,000 7,752,000 Total liabilities and stockholders' equity$7,296,000 $13,953,600 The income from operations and interest expense from the income statement for both companies were as follows: CamperMcSeadIncome from operations before tax$675,480 $2,344,840 Interest expense52,000 192,200 a. Determine the debt ratio for both companies. Round to one decimal place.Camperfill in the blank 1 %McSeadfill in the blank 2 %b. Determine the ratio of liabilities to stockholders' equity for both companies. Enter your answers as decimal values rounded to one decimal place.Camperfill in the blank 3McSeadfill in the blank 4c. Determine the number of times interest charges are earned for both companies. Round to one decimal place.Camperfill in the blank 5McSeadfill in the blank 6

Ratio analysis is one of the ways the users of financial statement can perform to analyze the…

Answered: Camper Company and McSead, Inc., are…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 17BEA: Ernst Companys balance sheet shows total liabilities of 32,500,000, total stockholders equity of...

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Camper Company and McSead, Inc., are the two largest toy companies. Condensed liabilities and stockholders' equity from a recent balance sheet are shown for each company as follows:

	Camper	McSead
Current liabilities	$1,778,000		$3,907,000
Long-term debt	958,000		2,294,600
Total liabilities	$2,736,000		$6,201,600
Total stockholders' equity	4,560,000		7,752,000
Total liabilities and stockholders' equity	$7,296,000		$13,953,600

The income from operations and interest expense from the income statement for both companies were as follows:

	Camper	McSead
Income from operations before tax	$675,480		$2,344,840
Interest expense	52,000		192,200

a. Determine the debt ratio for both companies. Round to one decimal place.

Camper	fill in the blank 1 %
McSead	fill in the blank 2 %

b. Determine the ratio of liabilities to stockholders' equity for both companies. Enter your answers as decimal values rounded to one decimal place.

Camper	fill in the blank 3
McSead	fill in the blank 4

c. Determine the number of times interest charges are earned for both companies. Round to one decimal place.

Camper	fill in the blank 5
McSead	fill in the blank 6

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