16)

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

TIMES MIRROR AND GLASS Co. Income Statement
Sales	$	270,000
Cost of goods sold		130,000
Gross profit	$	140,000
Selling and administrative expense		43,200
Lease expense		11,700
Operating profit*	$	85,100
Interest expense		9,300
Earnings before taxes	$	75,800
Taxes (30%)		30,320
Earnings after taxes	$	45,480
*Equals income before interest and taxes.

a.	Compute the interest coverage ratio.(Round your answer to 2 decimal places.)

Interest coverage

times

b.	Compute the fixed charge coverage ratio.(Round your answer to 2 decimal places.)

Fixed charge coverage

times

The total assets for this company equal $205,000. Set up the equation for the Du Pont system of ratio analysis.

c.	Compute the profit margin ratio.(Input your answer as a percent rounded to 2 decimal places.)

Profit margin

%

d.	Compute the total asset turnover ratio.(Round your answer to 2 decimal places.)

Total asset turnover

times

e.	Compute the return on assets (investment).(Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

Return on assets

%