value: 5.00 points Husain, Inc.\'s income statement and other financial informat

Question

value: 5.00 points 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 Cost of goods sold S214,131 75,360 Gross profit Selling, general & administrative expenses 138,771 14,135 Operating income Interest expense 124,636 4,497 Income before taxes Income tax expense 120,139 4,514 Net income $115,625 Balance sheet information: Current assets Noncurrent assets Current liabilities Long-term debt $255,500 511,000 61,000 122,000 Using the above information:

Explanation / Answer

Answer = A) VERTICAL ANALYSIS OF INCOME STATEMENT Particulars Amount Percentage Sales Revenue $    2,14,131 100% Cost of Goods Sold $        75,360 35% Gross Profit $    1,38,771 65% Selling , General and Operating Expenses $        14,135 7% Operating Income $    1,24,636 58% Interest Expenses $          4,497 2% Income Before Taxes $    1,20,139 56% Income Tax Expenses $          4,514 2% Net Income $    1,15,625 54% Answer =B) Debt To Assets Ratio = Debt / Assets Debt To Assets Ratio = Debt = $    1,22,000 Divide By "/" By Assets $    7,66,000 ($ 255,000 + $ 511,000) Debt To Assets Ratio = 0.16 or 16% Answer = C) Calculation of times of Interest Earned Ratio = Income before interest and Taxes(EBIT) / Interest Expenses Income Before interest and Taxes = Net income After Taxes + Income Taxes + Interest Income Before interest and Taxes = $ 115,625 + $ 4514 + $ 4497 Income Before interest and Taxes = $ 124,636 Calculation of times of Interest Earned Ratio = EBIT = 124636 Divide By "/" By Interest Expenses 4497 Calculation of times of Interest Earned Ratio =               27.72 Times Calculation of times of Interest Earned Ratio = 27.72 Times

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