Question
The times interest earned ratio measures a companys ability to maintain profit after paying interest. pay interest and debt on the due date. make interest
- The times interest earned ratio measures a companys ability to
- maintain profit after paying interest.
- pay interest and debt on the due date.
- make interest payments out of current earnings.
- pay interest and debt from current assets already on hand.
- The 2020 and 2021 partial balance sheets for Ottoman Industries are shown below.
-
The 2020and 2021 partial balance sheets for Ottoman Industries is shown below. 2020
2021
Current assets
Cash and cash equivalents
$ 16,000
$ 14,000
Accounts receivable, net
20,000
24,000
Inventory
25,000
23,000
Marketable equity securities
5,000
5,000
Total current assets
66,000
66,000
Plant & equipment, net
60,000
40,000
Total assets
$126,000
$106,000
Current liabilities
$ 20,000
$ 30,000
Noncurrent liabilities
60,000
40,000
Total liabilities
80,000
70,000
Total stockholders equity
46,000
36,000
Total liabilities and stockholders equity
$126,000
$106,000
Calculate the current ratio for 2021.
- 0.47
- 0.62
- 1.37
- 2.20
44. The 2020 and 2021 partial balance sheets for Ottoman Industries is shown below:
2020
2021
Current assets
Cash and cash equivalents
$ 16,000
$ 14,000
Accounts receivable, net
20,000
24,000
Inventory
25,000
23,000
Marketable equity securities
5,000
5,000
Total current assets
66,000
66,000
Plant & equipment, net
60,000
40,000
Total assets
$126,000
$106,000
Current liabilities
$ 20,000
$ 30,000
Noncurrent liabilities
60,000
40,000
Total liabilities
80,000
70,000
Total stockholders equity
46,000
36,000
Total liabilities and stockholders equity
$126,000
$106,000
Calculate the 2021 acid-test ratio.
- 1.27
- 1.51
- 1.43
- 2.20
Calculate Ottomans working capital for 2021.
-
- $26,000
- $36,000
- 1.65
- 1.53
-
- The 2020and 2021 partial balance sheets for Ottoman Industries is shown below.
-
2020
2021
Current assets
Cash and cash equivalents
$ 16,000
$ 14,000
Accounts receivable, net
20,000
24,000
Inventory
25,000
23,000
Marketable equity securities
5,000
5,000
Total current assets
66,000
66,000
Plant & equipment, net
60,000
40,000
Total assets
$126,000
$106,000
Current liabilities
$ 20,000
$ 30,000
Noncurrent liabilities
60,000
40,000
Total liabilities
80,000
70,000
Total stockholders equity
46,000
36,000
Total liabilities and stockholders equity
$126,000
$106,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started