Question
Using the income statement for Times Mirror and Glass Co., compute the following ratios: TIMES MIRROR AND GLASS Co. Income Statement Sales $ 126,000 Cost
Using the income statement for Times Mirror and Glass Co., compute the following ratios: TIMES MIRROR AND GLASS Co. Income Statement Sales $ 126,000 Cost of goods sold 93,000 Gross profit $ 33,000 Selling and administrative expense 11,000 Lease expense 4,000 Operating profit* $ 18,000 Interest expense 3,000 Earnings before taxes $ 15,000 Taxes (30%) 4,500 Earnings after taxes $ 10,500 *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 $80,000. Set up the equation for the Du Pont system of ratio analysis. c. Compute the profit margin. (Input your answer as a percent rounded to 2 decimal places.) d. Compute the total asset turnover. (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.)
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