Husain, Inc.’s income statement and other financial information for the current
ID: 2475090 • Letter: H
Question
Husain, Inc.’s income statement and other financial information for the current year is presented below. Hussain, Inc. Income Statement For the year ended December 31 Sales revenue $ 189,131 Cost of goods sold 70,360 Gross profit 118,771 Selling, general & administrative expenses 12,885 Operating income 105,886 Interest expense 3,747 Income before taxes 102,139 Income tax expense 4,014 Net income $ 98,125 Balance sheet information: Current assets $ 253,000 Noncurrent assets 506,000 Current liabilities 56,000 Long-term debt 112,000 Using the above information: Calculate the debt-to-assets ratio.
Explanation / Answer
Total debt to total assets is a leverage ratio that defines the total amount of debt relative to assets.
Total Debt to Total assets = Short Term Debt + Long Term Debt
Total Assets
Total Debt to Total assets = $ 56,000 + $ 1,12,000
$ 7,59,000
= 22.13 %
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