Sales/ Revenue $100,000
Less Cost of goods sold 30,000
=Gross Profit $70,000
Less operating Expenses
Salary exp 10,000
Depreciation exp 5000
Electricity bill 5000
Admin expenses 10000
General expenses 5000
= EBIT/ Operating income $35000
Less interest expense 8000
= EBT $27000
Less taxes 7000
= Net income / Net profit $20,000
Rabigh Company
Income Statement
For the year ended December 2019
Times Interest Earned Ratio=
EBIT / Interest Expense
= $35000/$8000= 4.375
Rabigh Company
Balance Sheet
As on 31st, December 2019
Assets
Accounts Receivable 70189
Marketable Securities 70389
Inventory 70289
Plant and equipment 142,258
Building 55,254
Total assets $ 478,669
LIABILITIES and STOCKHOLDERS' EQUITY
Accounts Payable 53,108
Notes Payable 53,510
Bonds Payable 53,308
Long-term liabilities 32,495
Total liabilities 192,421
Stockholders' equity 286,248
Total liabilities and stockholders' equity $ 478,669
1. Debt Ratio= Total Debt/ Total
Assets
= $32495/$478669
=.06*100
=6%
Assets= Liability + O/E
100= 6% +94%
2. Debt to Equity Ratio= Long term
Debt/ Total Equity
=$32495/$286, 248
= .113
=11.3%
Debt to Tangible Net worth ratio
Total Liabilities
Shareholders' Equity - Intangible Assets
$32495/$286,248-0
= 11.3%
Long term Debt Analysis/ Debt Ratios/ Financial
Leverage Ratios
1. Times Interest Earned Ratio
2. Fixed Charges coverage Ratio
3. Debt to Assets Ratio
4. Debt to Equity Ratio
5. Debt to Tangible Net Worth Ratio
