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Calculate financial leverage measures

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Reference no: EM13912370

Calculate financial leverage measures. The following information was available for the year ended December 31, 2013:
Earnings before interest and

taxes (operating income) ....... $60,000
Interest expense ........... 10,000
Income tax expense ......... 15,000
Net income ............. $ 35,000
Total assets at year-end ........... 200,000
Total liabilities at year-end....... 120,000

Required:

a. Calculate the debt ratio at December 31, 2013.

b. Calculate the debt/equity ratio at December 31, 2013.

c. Calculate the times interest earned for the year ended December 31, 2013.

Reference no: EM13912370

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