Times-Interest-Earned Ratio

The Morris Corporation has $250,000 of debt outstanding, and it pays an interest rate of 11% annually. Morris's annual sales are $1.25 million, its average tax rate is 40%, and its net profit margin on sales is 3%. If the company does not maintain a TIE ratio of at least 4 to 1, then its bank will refuse to renew the loan, and bankruptcy will result. What is Morris's TIE ratio? Do not round intermediate calculations. Round your answer to two decimal places.

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The Nelson Company has $1,175,000 in current assets and $470,000 in current liabilities. Its initial inventory level is $305,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.0? Do not round intermediate calculations. Round your answer to the nearest dollar.

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What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Do not round intermediate calculations. Round your answer to two decimal places.

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Gardial & Son has an ROA of 11%, a 2% profit margin, and a return on equity equal to 19%. Do not round intermediate calculations. Round your answers to two decimal places.

What is the company's total assets turnover?______

What is the firm's equity multiplier?

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