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A company has sales of $65,000 and total costs of $14,000, including depreciation and interest expenses....

A company has sales of $65,000 and total costs of $14,000, including depreciation and interest expenses. The average tax rate is 50%.

Total assets are $73,000 and total equity is $36,000.

What is the company's net income?

What is the total debt ratio (including all liabilities)?

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Answer #1
Sales revenue 65000
Less: Cost including dep and interest 14000
Pre tax Income 51000
Less: tax @ 50% 25500
After tax Income 25500
Total assets 73000
Less: Total Equity 36000
Total debts 37000
Total debts ratio = Total debts / Total assets *100
37000/73000* 100 = 50.68%
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