The balance sheet for Shaver Corporation reported the following: cash, $14,000; short-term investments, $19,000; net accounts receivable, $53,000; inventory, $58,000; prepaids, $19,000; equipment, $115,000; current liabilities, $58,000; notes payable (longterm), $88,000; total stockholders' equity, $132,000; net income, $5,120; interest expense, $8,000; income before income taxes, $10,680. Required: 1. Compute Shaver's debt-to-assets ratio and times interest earned ratio. 2-a. Based on these ratios, does it appear Shaver relies mainly on debt or equity to finance its assets? 2-b. Is it probable that Shaver will be able to meet its future interest obligations? Complete this question by entering your answers in the tabs below. Compute Shaver's debt-to-assets ratio and times interest earned ratio. (Round your answers to 2 decimal places.)
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