(Solved by Humans)-Problem 16-44 Leverage Ratios Grammatico Company has just completed its third year of operations....

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Problem 16-44         Leverage Ratios Grammatico Company has just completed its third year of operations. The income statement is as follows:   Sales $ 2,460,000 Less: Cost of goods sold (1,410,000) Gross profit margin $ 1,050,000 Less: Selling and administrative expenses (710,000) Operating income $    340,000 Less: Interest expense (140,000) Income before taxes $    200,000 Less: Income taxes (68,000) Net income $    132,000 Selected information from the balance sheet is as follows:                                                                                    Current liabilities $1,000,000 Long-term liabilities 1,500,000 Total liabilities $2,500,000 Common stock $4,000,000 Retained earnings 750,000 Total equity $4,750,000   Required: Note: Round answers to two decimal places. 1.       Compute the times-interest-earned ratio. 2.       Compute the debt ratio. 3.       CONCEPTUAL CONNECTION Assume that the lower quartile, median, and upper quartile values for debt and times-interest-earned ratios in Grammatico’s industry are as follows: Times-interest-earned:                        2.4, 5.4, 16.1 Debt:                                                  0.3, 0.8, 2.4   How does Grammatico compare with the industrial norms? Does it have too much  debt?