In: Finance
Using the income statement for Times Mirror and Glass Co.,
compute the following ratios:
TIMES MIRROR AND GLASS Co. Income Statement |
||
Sales | $ | 281,000 |
Cost of goods sold | 169,000 | |
Gross profit | $ | 112,000 |
Selling and administrative expense | 44,800 | |
Lease expense | 17,500 | |
Operating profit* | $ | 49,700 |
Interest expense | 8,100 | |
Earnings before taxes | $ | 41,600 |
Taxes (30%) | 16,640 | |
Earnings after taxes | $ | 24,960 |
*Equals income before interest and taxes. | ||
a.Compute the interest coverage ratio.
(Round your answer to 2 decimal places.) Compute the fixed charge coverage ratio. (Round your
answer to 2 decimal places.) The total assets for this company equal $211,000. Set up the
equation for the Du Pont system of ratio
analysis.
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