Lindboe Corporation has provided the following financial data:
Dividends on common stock during Year 2 totaled $4,800. The market price of common stock at the end of Year 2 was $5.46 per share.Required:a. What is the company's times interest earned ratio for Year 2?b. What is the company's debt-to-equity ratio at the end of Year 2?c. What is the company's equity multiplier at the end of Year 2?d. What is the company's net profit margin percentage for Year 2?e. What is the company's gross margin percentage for Year 2?f. What is the company's return on total assets for Year 2?g. What is the company's return on equity for Year 2?

a.Times interest earned ratio = Earnings before interest expense and income taxes ÷ Interest expense= $61,714 ÷ $12,000 = 5.14 (rounded)b.Debt-to-equity ratio = Total liabilities ÷ Stockholders' equity= $397,000 ÷ $1,150,000 = 0.35 (rounded)c.Equity multiplier = Average total assets* ÷ Average stockholders' equity*= $1,538,500÷$1,135,000 = 1.36 (rounded)*Average total assets = ($1,547,000 + $1,530,000) ÷ 2 = $1,538,500**Average stockholders' equity = ($1,150,000 + $1,120,000) ÷ 2 = $1,135,000d.Net profit margin percentage = Net income ÷ Sales= $34,800 ÷ $1,220,000 = 2.9% (rounded)e.Gross margin percentage = Gross margin ÷ Sales= $520,000 ÷ $1,220,000 = 42.6% (rounded)f.Return on total assets = Adjusted net income* ÷ Average total assets**= $43,200 ÷ $1,538,500 = 2.81% (rounded)*Adjusted net income = Net income + [Interest expense × (1 − Tax rate)]= $34,800 + [$12,000 × (1 − 0.30)] = $43,200**Average total assets = ($1,547,000 + $1,530,000) ÷ 2 = $1,538,500g.Return on equity = Net income ÷ Average stockholders' equity*= $34,800 ÷ $1,135,000 = 3.07% (rounded)*Average stockholders' equity = ($1,150,000 + $1,120,000) ÷ 2 = $1,135,000