Practice Exercise 11â€“II: Solvency RatiosRefer to Doctors Smith and Brownâ€™s financial statements presented in the preceding Chapter 10.Required1. Set up a worksheet for the solvency ratios.2. Compute these ratios for Doctors Smith and Brown. To do so, you will need one additional piece of information that is not present on the doctorsâ€™ statements: their maximum annual debt service is $22,200.Practice Exercise 11â€“II: Profitability RatiosRefer to Doctors Smith and Brownâ€™s financial statements presented in the preceding Chapter 10.Required1. Set up a worksheet for the profitability ratios.2. Compute these ratios for Doctors Smith and Brown. All the necessary information is present on the doctorsâ€™ statements.[Hint: â€œOperating Income (Loss)â€ is also known as â€œIncome from Operations.â€]
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