#2. Company A is a mid-sized industrial corporation based in Santa Clara County, California. Its audited balance sheet and income statement ending 12/31/2001 are listed below.

Balance Sheet (in $000)
Assets			Liabilities & Equity
Cash	$ 4,200		Accounts Payable	$ 27,000
Marketable Securities	$ 5,000		Notes Payable (due within 3 months)	$ 15,000
Accounts Receivable	$ 49,800		Long-term debt	$ 36,000
Inventory	$ 40,000		Common Stock	$ 30,000
Fixed Assets	$ 44,000		Additional Paid-in Capital	$ 5,000
Total Assets	$ 143,000		Retained Earnings	$ 30,000
			Total Liabilities & Equity	$ 143,000
Income Statement (in $000)
Sales	$ 210,000
Cost of goods sold	$ 140,000
Gross Margin	$ 70,000
Selling & Administrative Expenses	$ 20,000
Depreciation	$ 9,000
EBIT	$ 41,000
Interest Expense	$ 5,000
Earnings before tax	$ 36,000
Taxes	$ 11,000
Net Income	$ 25,000

1). Calculate current ratio.

A). 2.1

B). 2.4

C). 2.6

D). 2.8

E). 3.0

2). Calculate fixed-asset turnover ratio.

A). 4.2

B). 4.4

C). 4.6

D). 4.8

E). 5.0

3). Calculate the firms time interest earned.

A). 7.4

B). 7.6

C). 7.8

D). 8.0

E). 8.2