Debt utilization and du pont system of analysis

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Debt utilization and Du Pont system of analysis [LO3] Using the income statement for Times Mirror and Glass Co., compute the following ratios: TIMES MIRROR AND GLASS Co. Income Statement Sales $ 244,000 Cost of goods sold 135,000 Gross profit $ 109,000 Selling and administrative expense 47,900 Lease expense 18,200 Operating profit* $ 42,900 Interest expense 8,300 Earnings before taxes $ 34,600 Taxes (30%) 13,840 Earnings after taxes $ 20,760 *Equals income before interest and taxes. a. Compute the interest coverage ratio. (Round your answer to 2 decimal places.) Interest coverage times b. Compute the fixed charge coverage ratio. (Round your answer to 2 decimal places.) Fixed charge coverage times The total assets for this company equal $240,000. 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.) Profit margin % d. Compute the total asset turnover ratio. (Round your answer to 2 decimal places.) Total asset turnover times e. Compute the return on assets (investment). (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Return on assets % References WorksheetProblem 3-24 Debt utilization and Du Pont system of analysis [LO3] ©2016 McGraw-Hill Education. All rights reserved.

Reference no: EM131302390

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