Bargain Dea, Inc, is a leading reta ler specializing in consumer electronics. A

Question

Bargain Dea, Inc, is a leading reta ler specializing in consumer electronics. A condensed income stetement and belance sheet for the fecal year ended January 30, 2016, are shown below Bargain Deal, Ino Balaace Sheet At Janusary 30, 2016 3 in miliiona) s 2,146 1,322 1,247 ,068 Cash and csah eqairalenta hort- term inveztmenta Merchandsne inventori 513, 927 Liabiliti" shareholder", Egusey nn Curzen: 1iab1211: 5,300 Ascounts payabl Other aurzent 1iabilsts Total ourrent liabilitiea Long-tern 1isbslities Shareholdeza equity 7otal liabilitie and abazeboldeza equity 13, 927 Prev 5of Next>

Explanation / Answer

Solution 1a:

Current ratio = Current Assets / Current liabilities = $10,209 / $9,475 = 1.08:1

Solution 1b:

Acid test ratio = Quick assets / current liabilties

Quick assets = Current assets - Inventory = $10,209 - $5,068 = $5,141

Acid test ratio = $5,141 / $9,475 = 0.54:1

Solution 1c:

Debt to Equity ratio = Total liabilities / Equity = ($9,475 + $2,250) / $2,202 = 5.32:1

Solution 1d:

Time interest earned ratio = Earning before interest and taxes / Interest expense

Earning before interest and taxes = Income before income taxes + Interest expense

= $1,361 + $233 = $1,594

Times interest earned = $1,594 / $233 = 6.84 times

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.