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The president of Rodrigez, Inc., has asked you to gather some statistics about his corporation's solvency. You have compiled the following data: Profit = 900,000 Income Tax Rate = 35% Interest Expense =100,000 Total Liabilities = 2,048,000 Total Equity = 4,352,000   Using these data, calculate: 1. Times interest earned ratio 2. Debit ratio 3. Equity ratio

The president of Rodrigez, Inc., has asked you to gather some statistics about his corporation's solvency. You have compiled the following data: Profit = 900,000 Income Tax Rate = 35% Interest Expense =100,000 Total Liabilities = 2,048,000 Total Equity = 4,352,000   Using these data, calculate: 1. Times interest earned ratio 2. Debit ratio 3. Equity ratio

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter4: The Accounting Cycle
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Problem 2 (Solvency Ratios)

The president of Rodrigez, Inc., has asked you to gather some statistics about his corporation's solvency. You have compiled the following data:

Profit = 900,000

Income Tax Rate = 35%

Interest Expense =100,000

Total Liabilities = 2,048,000

Total Equity = 4,352,000

 

Using these data, calculate:
1. Times interest earned ratio
2. Debit ratio
3. Equity ratio

Please provide a solution.

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