Compute interest coverage ratio and profit margin ratio

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Reference no: EM131450017

Using the income statement for Times Mirror and Glass Co., compute the following ratios: TIMES MIRROR AND GLASS Co. Income Statement Sales $ 221,000 Cost of goods sold 113,000 Gross profit $ 108,000 Selling and administrative expense 43,700 Lease expense 11,900 Operating profit* $ 52,400 Interest expense 7,100 Earnings before taxes $ 45,300 Taxes (30%) 18,120 Earnings after taxes $ 27,180 *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 $162,000. Set up the equation for the Du Pont system of ratio analysis. c. Compute the profit margin ratio. (Input your answer as a percent rounded to 2 decimal places.) d. Compute the total asset turnover ratio. (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.) eBook & Resources eBook: Ratio Analysis ©2017 McGraw-Hill Education. All rights reserved.

Reference no: EM131450017

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