A firm has total interest charges of $10,000 per year, sales of $1 million, a tax rate of 40 percent, and a net profit margin of 6 percent. What is the firm's times-interest-earned ratio? a. 16 times b. 10 times c. 7 times d. 11 times e. 20 times
Q: Ozark Industries reported net income of $75 million in 2002. The company’s corporate tax rate was 40…
A: The sales level of a company directly affect the company's net income. In order to increase the net…
Q: McCormack co. Wishes to maintain a growth rate of 6 percent a year, a debt equity ratio of 0.49, and…
A: Calculation of profit margin: Answer: Profit margin is 12.76%
Q: An A firm has sales of $10 million, variable costs of $4 million, fixed expenses of $1.5 million,…
A: 1) Computation of DOL, DFL, DCL is as follows:DOL=Sales -Variable costSales -variable cost-fixed…
Q: The Karson transport company currently has net operating income of $495,000 and pays interest…
A: Times interest earned ratio = operating income/interest expense
Q: An enterprise with a profit before interest and tax of 150,000, a compound leverage level of 3 and a…
A: Compound Leverage =3 Financial Leverage = 1.5 Current Profit before interest and tax =150000…
Q: a firm has an a profit margin of 3.8% and an equity multiplier of 1.90. its sales are 166.0 mil usd,…
A: Using Dupont's ROE decomposition formula,ROE = Net income / Equity = Net income / Sales x Sales /…
Q: Selzer Inc. sells all its merchandise on credit. It has a profit margin of 4 percent, days sales…
A: Return on equity refers to the earnings made over equity amount invested. Higher return on equity is…
Q: Thomson Trucking has $16 billion in assets, and its tax rate is 40%.Its basic earning power (BEP)…
A: The time's interest earned ratio is the ratio which shows the ability of the company to meet the…
Q: A firm has total interest charges of $10,000 per year, sates of $1 million, a tax rate of 40…
A: Times interest earned ratio or interest coverage ratio shows ability of the company in paying it's…
Q: A business starts this year with 2,500,000 assets with no debt. The expected ROE equals 10%. Suppose…
A: Return on equity (ROE) is used to measure the returns from shareholder’s equity. Shareholder’s…
Q: 2) The net income is RO 25,000. Last year's sales were RO 180,000. The total assets represent half…
A: The question is to find the need of external fund to continue operation and achieve sales growth.…
Q: The karson transport company currently has net operating income of $508,000 and pays interest…
A: times interest earned = net operating income/interest expense
Q: Ruby Corp's sales last year were $435,500, its operating costs were $350,000, and its interest…
A: TIE number is earnings before interest and taxes (EBIT) divided by the total interest payable
Q: A firm has a net income of 10 million and a debt ratio of 60%. Its sales are 200 million and it has…
A: Formulas to be used where ROE = Return on equity Equity ratio = 1 - debt ratio
Q: he Brenmar Sales Company had a gross profit margin (gross profits÷sales) of 34 percent and sales…
A: GIVEN, gross profit margin =34% sales = $8.3 million credit sale = 79% of sales cash sales = (100…
Q: average net profits expected in future by Khalifa and Co. are OMR 30,000 per year. The average…
A: 1) super profit method = super profit* number of year purchased Super profit= (actual average…
Q: Humphrey Hotels’ operating income (EBIT) is $40 million. The company’s times interest earned (TIE)…
A: Return on Assets is the ratio that shows the profitability of the assets of the company which means…
Q: A firm is fully invested in commercial real estate. The commercial real estate it owns experienced a…
A: Debt refers to the funds raised from the outside sources in order to finance the business…
Q: VWX Inc., has sales of $500,000, net income of $80,000, dividend payout of 50%, total assets of…
A: Sales are $500,000 Net income is $80,000. Dividend payout ratio is 50%. Total assets are $700,000…
Q: Humphrey Hotels' operating income (EBIT) is $40 million. The company's times interest earned (TIE)…
A: Given: EBIT $40 million Times interest earned(TIE) 8 times Tax rate 40% Basic Earning…
Q: The Brenmar Sales Company had a gross profit margin (gross profits÷sales) of 34 percent and…
A: Average collection period is period required to receive all accounts receivable that means money…
Q: An A firm has sales of $10 million, variable costs of $4 million, fixed expenses of $1.5 million,…
A: formula for DOL, DFL and DCL DOL=contibutionEBIT=sales - variable costsales - variable cost - fixed…
Q: A corporation has $344 million in sales,$232 million in COGS, $53 million in inventory, $128 million…
A: Cash conversion cycle = [Average inventoryCost of goods sold + Average receivablesNet sales-Average…
Q: The annual sales of a company are $235,000 including sales tax at 17.5%. Half of the sales are on…
A: We have the following information: Annual Sales: $235,000 Annual sales includes a sales tax of…
Q: The free cash flow to the firm is reported as $198 million. The interest expense to the firm is $15…
A: Free Cash Flows for Equity = Free Cash Flows of the Firm + Debt - (Interest*(1-tax)) Free Cash Flows…
Q: BN had 5 degrees of operating leverage when its profit before taxes was P200,000. If the company’s…
A: Degree of operating leverage = % change in operating income% change in sales…
Q: Calculate the degree of financial leverage for a firm with EBIT of $6,000,000, fixed cost of…
A: The degree of financial leverage shows the potential impact of change in operating income that is…
Q: Suppose the growth rate of the firm's profit is 7 percent, the interest rate is 9 percent, and the…
A: In the given question we need to compute the value of the firm.
Q: Selzer Co. sells all its merchandise on credit. It has a profit margin of 4%, days sales outstanding…
A: PROFIT MARGIN 4% DAYS SALE OUTSTANDING 60 DAYS RECEIVABLE 150,000 TOTAL ASSETS 3 MILLION…
Q: Bulldogs Inc. currently has earnings before interest and taxes of P3,000,000, a degree of combined…
A: Degree of Operating Leverage = Degree of Combined Leverage / Degree of Financial Leverage = 8 / 2 =…
Q: A company retains 7,50,000 out of its current earnings. The expected rate of return to the…
A: Retained Earnings (RE) are the aggregate sum of a company's profits that are kept for internal…
Q: times-interest-earned ratio
A: Times interest earned ratio = Earnings before interest and taxes/Interest expense
Q: The profit margin is 15% and the dividend payout is 70%. Last year sales were RO 100 million and…
A: Financing is one of important financial decision for firm. To start up new activities or projects…
Q: Sunny Co. recently reported sales of P100 million, and net income of P10 million. The firm has P80…
A: The increase in retained earnings can be calculated as increase in net income after dividend…
Q: YiYu Manufacturer wishes to maintain a growth rate of 6 percent a year, a debt-equity ratio of 0.45,…
A: Here, Growth Rate is 6% Debt Equity Ratio is 0.45 Dividend Payout Ratio is 30% Total Assets to Sales…
Q: The firm X has sales of $420,000, a tax rate of 32%, the payout ratio of 35%, and a net profit…
A: The given data are - Sales =$420,000 Net profit margin =6% So, Net Profit margin = Net profit/Sales…
Q: (Using common-size financial statements) The S&H Construction Company expects to have total sales…
A: Pro-Forma Income Statement Sales $1,54,00,000 Cost of Goods Sold ($15400000 * 62%) $95,48,000…
Q: Humphrey Hotels’ operating income (EBIT) is P40 million. The company’s times interest earned (TIE)…
A: In terms of accountancy, assets are the business items which provides benefit over a long period of…
Q: A firm needs $200,000 to start and expects Sales $300,000…
A: Return on Owner's Investment = Net Income / Owner's equity Owner's equity in case 1 =$200,000…
A firm has total interest charges of $10,000 per year, sales of $1 million, a tax rate of 40 percent, and a net profit margin of 6 percent. What is the firm's times-interest-earned ratio?
a. 16 times
b. 10 times
c. 7 times
d. 11 times
e. 20 times
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- A firm has total interest charges of $10,000 per year, sates of $1 million, a tax rate of 40 percent, and a net profit margin of 6 percent. What is the firm's times-interest-earned ratio?A firm is fully invested in commercial real estate. The commercial real estate it owns experienced a rate of return of 8% per year, but the equity holders of the firm earned 18% a year. If the firm's debt earns 2% a yeare, what is the firms debt ratio?Suppose that X company has a total sales of $340,000. And a net income after tax of $47,600. Calculate the operating margin if you knew that the income tax rate is 30% and the interest rate is 15% A) 25.00% B) 35.30% C) 31.30% D) 23.50%
- 1. You have the following information on the income statement this year: Unit sales: 1,000 price/unit: 49 VC/unit: 25 FC/year: 10,000 De[/year: 5,000 On the balance sheet last year, total asset is $20,000 and total equity is $5000. The dividend payout ration is 25%, the interest rate is 10% and the tax rate is 35%. How much interest does the firm pay? 2. You have the following information on the income statement this year: Unit sales: 1,000 Price/unit: 49 VC/unit: 25 FC/year: 10,000 Dep/year: 5,000 On the balance sheet last year, total asset is $20, 000 and total equity is $5,000. The dividend payout ratio is 25%, the interest rate is 10%, and the tax rate is 35%. What is the firm's EBITA firm has an ROA of 8%, sales of $80, and total assets of $75. What is its profit margin?Note: The rate of interest on Epona's overdraft is 10 per cent per annum. Required: a. Calculate four ratios for each company showing profitability and five showing liquidity. (Use 365 days a year. Round your trade receivable days and credit period ratio answers to 1 decimal place, and all other answers to 2 decimal places.) find profit before interest and tax, return on capital employed (before interest and tax), capital turnover and credit period ratio.
- Choose the correct letter of answer: The following data applies to a firm: Interest Charges P10 Million, Sales/CGS P80 Million, Tax Rate 50% and Net profit margin 10%. What is the firm's interest covered ration? a. 1.6b. 2.6c. 3.6d. 4.6e. 5.6Red Company has total interest charges of $10,000 per year, sales of $1 million, a tax rate of 40 percent, and a net profit margin of 6 percent. The firm's times interest earned ratio is: (Wholte number)Assume that a farmer has $157,500 in total assets and 102,600 in total debt faces 20% income tax rate and 40% consumption rate. Further assume that the rate of return on assets is 19.5% what is the interest rate if the firm growth rate is 11.5%?
- A firm has a profit margin of 15% on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500.00, and a after-tax interest cost on total debt of 5%, what is the firm's ROA?A firm requires an investment of $30,000 and borrows $20,000 at 7%. If the return on equity is 16% and the tax rate is 25%, what is the firm's WACC? O A. 8.83% O B. 7.07% OC. 17.67% D. 10.6%Chutes & Co. has interest expense of $1.84 million and an operating margin of 10.8% on total sales of $30.8 million. What is Chutes' interest coverage ratio? The interest coverage ratio is _____ times.