Calculation of operating profit margin and time interest

Assignment Help Finance Basics

Reference no: EM13356894

Calculation of Operating Profit Margin and Time interest earned.

Utilizing the attached Enclosure 1 "Balance Sheet and Income Statement for Spectrum, Inc"

ENCLOSURE 1

Spectrum, Inc. BALANCE SHEET (000)
Cash	$500
Accounts receivable	1,500
Inventories	500
Current assets	2,500
Net fixed assets	5,000
Total Assets	$7,500.00

Accounts payable	1,200
Bank note	300
Total current liabilities	1,500
Long term debt	4,000
Common stock	300
Retained earnings	1,700
Total liabilities and owner's equity	$7,500

Spectrum, Inc. INCOME STATEMENT (000)
Net sales	$8,500
Cost of goods sold	3,400
Gross profit	5,100
Operating expenses	2,900
Net operating income	2,200
Interest expense	580
Earnings before taxes	1,620
Income tax (34%)	551
Net income	$1,069

a) Compute the following ten (10) financial ratios and provide a one sentence explanation of the analytic use of each ratio test. Show your formulas and input. Accuracy to two decimal points is sufficient.
b) Evaluate how Spectrum's financial performance compares to their Industry for each calculated ratio. It is sufficient to rate each ratio as "G"= good, "S" = satisfactory, or "P" = poor.

	Industry Norms
Operating profit margin	8.3%
Times interest earned	3.93

Reference no: EM13356894

Questions Cloud

Deriving cash collected and cash paid using financial : deriving cash collected and cash paid using financial ratios given.all questions relate to the kimberly-clark corp.

Deriving days in inventory cash to cash cycle and operating : deriving days in inventory cash to cash cycle and operating cycle using ratiosall questions relate to the

Finding net income effective tax rate from given financial : finding net income effective tax rate from given financial ratiosall questions relate to the kimberly-clark corp.

Risk and return involves calculation of stocks beta and : risk and return involves calculation of stocks beta and expected return.beta and required rate of return a stock has a

Calculation of operating profit margin and time interest : calculation of operating profit margin and time interest earned.utilizing the attached enclosure 1 balance sheet and

Calculation of debt ratio and total asset turnover : calculation of debt ratio and total asset turnover ratio.utilizing the attached enclosure 1 balance sheet and income

Calculation of average collection period and return on : calculation of average collection period and return on equity.utilizing the attached enclosure 1 balance sheet and

Calculation of current ratio and acid test ratioutilizing : calculation of current ratio and acid test ratio.utilizing the attached enclosure 1 balance sheet and income statement

Financial statement analysis by ratio analysis of given : financial statement analysis by ratio analysis of given data.you are given the following data on two companies m and n

User Account

All Pages