What is Morriss TIE ratio

Assignment Help Financial Management

Reference no: EM13890082

The Morris Corporation has $600,000 of debt outstanding, and it pays an interest rate of 8% annually. Morris’s annual sales are $3 million, its average tax rate is 40%, and its net profit margin on sales is 3%. If the company does not maintain a TIE ratio of at least 5 to 1, then its bank will refuse to renew the loan and bankruptcy will result. What is Morris’s TIE ratio?

MUST BE DONE IN EXCEL FORMAT

Reference no: EM13890082

Questions Cloud

What is harveys maximum moving expense deduction : Harvey graduated college and accepted his first real job in july of 2014. His new employer gave him $500 to help cover the cost of the trip. He drove 1,250 miles. He used a rented trailer to move his personal goods. He paid $350 for meals and $200 fo..

Rate of return-profitability index for proposed investment : RWE Enterprises: Expansion Project Analysis RWE Enterprises, Inc. (RWE) is a small manufacturing firm located in the hills just outside of Nashville, TN. The firm is engaged in the manufacture and sale of feed supplements used by cattle raisers. Calc..

An online buying club offers membership : An online buying club offers a membership for $300 for which you will receive a 10 percent discount on all brand name items you purchase. How much would you have to buy to cover the cost of the membership?

Recently graduated with your business degree : Assume you have recently graduated with your business degree, and landed a new position at a company you had been researching during your senior year in college. You have been offered a lump-sum, sign-on bonus of $5,000. Would you personally choose ..

What is Morriss TIE ratio : The Morris Corporation has $600,000 of debt outstanding, and it pays an interest rate of 8% annually. Morris’s annual sales are $3 million, its average tax rate is 40%, and its net profit margin on sales is 3%. If the company does not maintain a TIE ..

Customer quality for purposes of granting trade credit : Which of the following would NOT typically be used for assessing customer quality for purposes of granting trade credit?

Compute the risk premium for the stock of omega tools : Compute the risk premium for the stock of Omega Tools if the risk free rate is 6%, the expected market return is 12%, and Omega's stock has a beta of .8.

What is the accumulated sum of stream of payments : What is the accumulated sum of the following stream of payments 2849 every year at the end of the year for 11 years at 9.04 percent compounded annually?

Assume that you just won the state lottery : Assume that you just won the state lottery. Your prize can be taken either in the form of $40,000 at the end of each of the next 25 years (i.e., $1 million over 25 years) or as a lump sum of $500,000 paid immediately. If you expect to be able to earn..

User Account

All Pages