Determine the number of times the bond interest charges are

Question

The following data were taken from the financial statements of Weal Construction Inc. for December 31, 2010 and 2009:

The income before income tax was $720,000 and $560,000 for the years 2010 and 2009, respectively.

(a) Determine the ratio of liabilities to stockholders' equity at the end of each year. Round to one decimal place.

(b) Determine the number of times the bond interest charges are earned during the year for both years. Round to one decimal place.

(c) What conclusions can be drawn from these data as to the company's ability to meet its currently maturingdebts?