Calculate the company debt to total assets

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Reference no: EM132788380

Question - Kahluha Manufacturers Inc. reported the following information in its financial statements

KAHLUHA MANFACTURERS INC. Statement of Financial Position June 30

Assets

2023

2022

Cash

$32,000

$29,000

Accounts receivable

7,500

5,500

Prepaid Insurance

1,100

1,450

Inventory

220,000

175,000

Building

145,000

155,000

Equipment

36,000

40,000

Total Assets

$441,600

$405,950

Liabilities and shareholders' equity

 

 

Accounts Payable

$12,500

$14,500

Notes Payable

10,000

0

Bonds Payable

145,000

95,000

Long-Term Debt

116,000

175,000

Common shares

25,000

25,000

Retained earnings

133,100

96,450

Total liabilities and shareholders' equity

$441,600

$405,950

Revenue

$450,000

$300,000

Operating expenses

300,000

210,000

Income from operations

150,000

90,000

Interest expense

6,000

9,000

Income tax expense

36,000

20,250

Net income

$108,000

$60,750

Instructions -

(a) Calculate the company's debt to total assets and times interest earned ratios for each year.

(b) Determine if the change from 2022- 2023 is an improvement or deterioration.

Reference no: EM132788380

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