P 7-10.           Consecutive five-year  balance sheets  and income statements  of Laura Gibson Corporation are  shown below  and on the  following page.

 

Required           a.    Compute the following for the years ended December 31,    2003–2007:

1.     Times interest earned

2.     Fixed charge coverage

3.     Debt ratio

4.     Debt/equity ratio

5.     Debt to tangible net worth

b.   Comment on the debt position and the trends indicated in the long-term debt-paying ability.

 

Laura Gibson Corporation Balance Sheets

December 31, 2003 through December 31, 2007

 

Liabilities and stockholders’ equity

Current liabilities:

 

Total  liabilities and

stockholders’ equity                                              $560,000                           $554,000                           $553,800                           $548,500                           $537,000

 

                                                                                                                                                                                                     

 

 

Laura Gibson Corporation Statement of Earnings

For the Years Ended December 31, 2003–2007

 

 

 

 

Earnings from continuing

 

2007                         2006                       2005                       2004                       2003

 

operations before income taxes                                $107,000                             $129,000                         $117,000                         $105,500                         $   78,000 Income taxes                                                                                      36,300                                   43,200                         39,800                               35,800                                     26,500

                                                                                                                                                                                              

Earnings from continuing  operations                              70,700                                   85,800                               77,200                               69,700                               51,500 Discontinued operating earnings

(loss), net of taxes:

From operations                                                                        (1,400)                                   1,300                                  1,400                                   1,450                                  1,600

On  disposal                                                                                        (900)                                           —                                          —                                          —                                          — Earnings (loss) from

 

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file 1509922093-Laura Gibson Corporation.xlsx preview (178 words )

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