Wyand Corporation's net operating income last year was $212,000; its interest expense was $26,000; its total stockholders' equity was $1,000,000; and its total liabilities were $370,000.Required:Compute the following for Year 2:a. Times interest earned ratio.b. Debt-to-equity ratio.
What will be an ideal response?
| a. | Times interest earned ratio = Earnings before interest expense and income taxes ÷ |
= $212,000 ÷ $26,000 = 8.15
| b. | Debt-to-equity ratio = Total liabilities ÷ Stockholders' equity |
Business
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