Using the income statement for the Sports Car Tire Company, compute the following ratios (show formula + calculations):

a. Interest coverage

b. The fixed charge coverage

The total assets for this company equal $40,000. Set up the formula for the DuPont system ratio analysis, and compare c,d and e.

c. Profit margin

d. Total asset turnover

e. Return on assets (investment)

The Sports Car Tire Company

Sales	$20,000
Less: Cost of goods sold	9,000
Gross profit	11,000
Less: Selling and administrative expense	4,000
Less: Lease expense	1,000
Operating profit*	6,000
Less: Interest expense	500
Earnings before taxes	5,500
Less: Taxes (40%)	2,200
Earnings after taxes	$3,300

*Equals income before interest and taxes.