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nataly862011 [7]
3 years ago
8

Using the income statement for Times Mirror and Glass Co., compute the following ratios:

Business
1 answer:
Umnica [9.8K]3 years ago
8 0

Answer:

(A) Interest coverage charge ratio= 6.21

(B) Fixed charge coverage = 2.84

(C) Profit margin ratio= 8.57%

(D) Total assets turnover= 1.55

(E) Return on assets= 13.26%

Explanation:

(A) The Interest coverage charge ratio can be calculated as follows= EBIT/Interest expense

= 45,300/7,300

= 6.21

(B) The fixed charge coverage can be calculated as follows

= income before fixed charge + interest/fixed charges + interest

= 45,300+13,300/7,300+13,300

= 58,600/20,600

= 2.84

(C) The profit margin ratio can be calculated as follows

= Net income/sales × 100

= 22,800/266,000 × 100

=0.0857 × 100

= 8.57%

(D) The total assets turnover can be calculated as follows

= Sales/total assets

= 266,000/172,000

= 1.55

(E) The return on assets can be calculated as follows

= Net income/Total assets × 100

= 22,800/172,000 × 100

= 0.13255×100

= 13.26%

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Probett’s Garage uses 120 boxes of cleaning cloths a year. The boxes cost $6 each. Ordering cost is $3 and holding cost is 10 pe
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Explanation:

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3 years ago
Leker exchanged real property that was used exclusively for business and had an adjusted tax basis of $20,000 for new real prope
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Answer:

$17,000

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You are given the following information about equipment that is required for your business. Assume that the equipment will be re
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Machine B EAC is $17,705.78 more than Machine A EAC.

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Equivalent Annual cost Machine A:

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