Ratio of Liabilities to Stockholders' Equity and Times Interest EarnedThe following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years: CurrentYearPreviousYearAccounts payable$698,000 $212,000 Current maturities of serial bonds payable460,000 460,000 Serial bonds payable, 10%1,920,000 2,380,000 Common stock, $1 par value100,000 130,000 Paid-in capital in excess of par1,130,000 1,130,000 Retained earnings3,900,000 3,100,000 The income before income tax expense was $714,000 and $624,800 for the current and previous years, respectively.a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round to one decimal place.Current yearfill in the blank 1Previous yearfill in the blank 2b. Determine the times interest earned ratio for both years. Round to one decimal place.Current yearfill in the blank 3Previous yearfill in the blank 4

The ratio analysis helps to analyse the financial statements of the business.

Answered: Ratio of Liabilities to Stockholders'…

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 13E: Ratio of liabilities to stockholders equity and times interest earned The following data were taken...

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Ratio of Liabilities to Stockholders' Equity and Times Interest Earned

The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years:

	Current Year	Previous Year
Accounts payable	$698,000		$212,000
Current maturities of serial bonds payable	460,000		460,000
Serial bonds payable, 10%	1,920,000		2,380,000
Common stock, $1 par value	100,000		130,000
Paid-in capital in excess of par	1,130,000		1,130,000
Retained earnings	3,900,000		3,100,000