E15-20B (Trading on the Equity Analysis) Presented below is information from the annual report of Todd Warner, Inc. Operating income $850,000 Bond interest expense 305,000 545,000 Income taxes 218,000 Net income $327,000 Bonds payable $3,000,000 Common st

E15-20B (Trading on the Equity Analysis) Presented below is information from the annual report of Todd Warner, Inc.

Operating income                $850,000

Bond interest expense          305,000

                                              545,000

Income taxes                         218,000

Net income                           $327,000

Bonds payable                 $3,000,000

Common stock                  $1,655,000

Retained earnings             $856,000

Instructions

Is Todd Warner, Inc. trading on the equity successfully? Explain.