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Hi all! I'm on a time crunch with this one...can anyone help me solve before I submit?
M10-13 (Algo) Computing the Debt-to-Assets Ratio and the Times Interest Earned Ratio [LO 10-5] The balance sheet for Shaver Corporation reported the following: cash, $15,500; short-term investments, $20,500; net accounts receivable, $56,000; inventory, $61,000; prepaids, $20,500; equipment, $127,000; current liabilities, $61,000; notes payable (longterm), \$91,000; total stockholders' equity, \$148,500; net income, $5,420; interest expense, $8,600; income before income taxes, $11,580. Required: 1. Compute Shaver's debt-to-assets ratio and times interest earned ratio. 2-a. Based on these ratios, does it appear Shaver relies mainly on debt or equity to finance its assets? 2-b. Is it probable that Shaver will be able to meet its future interest obligations? Compute Shaver's debt-to-assets ratio and times interest earned ratio. (Round your answers to 2 decimal places.)
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