Problem 3-24 Debt utilization and Du Pont system of analysis [LO3-3]

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

TIMES MIRROR AND GLASS COMPANY
Sales	$	293,000
Cost of goods sold		154,000
Gross profit	$	139,000
Selling and administrative expense		49,700
Lease expense		19,900
Operating profit*	$	69,400
Interest expense		7,300
Earnings before taxes	$	62,100
Taxes (30%)		24,840
Earnings after taxes	$	37,260
*Equals income before interest and taxes.

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

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

The total assets for this company equal $189,000. 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.)

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

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