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The following information is available for Pind Co, a manufacturing company. You are provided with an extract from the Income Statement: $ Operating profit Interest charges 42,000 (16,000) PBT 26,000 Taxation (5,460) 20,540 Pind Co has an operating profit margin of 15%. You are provided with an extract from its Statement of Financial Position: Equity and reserves Total equity and reserves 420,000 Non current liabilities Loan 150,000 5% Preference shares 40,000 Current liabilities Payable 50,000

The following information is available for Pind Co, a manufacturing company. You are provided with an extract from the Income Statement: $ Operating profit Interest charges 42,000 (16,000) PBT 26,000 Taxation (5,460) 20,540 Pind Co has an operating profit margin of 15%. You are provided with an extract from its Statement of Financial Position: Equity and reserves Total equity and reserves 420,000 Non current liabilities Loan 150,000 5% Preference shares 40,000 Current liabilities Payable 50,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 2P
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What is the gearing ratio and interest cover for Pind Co? Gearing Interest cover A 25% 2.625 31% 1.625 C 31% 2.625 25% 1.625
Transcribed Image Text:What is the gearing ratio and interest cover for Pind Co? Gearing Interest cover A 25% 2.625 31% 1.625 C 31% 2.625 25% 1.625
The following information is available for Pind Co, a manufacturing company. You are provided with an extract from the Income Statement: Operating profit Interest charges 42,000 (16,000) PBT 26,000 Taxation (5,460) 20,540 Pind Co has an operating profit margin of 15%. You are provided with an extract from its Statement of Financial Position: $ Equity and reserves Total equity and reserves 420,000 Non current liabilities Loan 150,000 5% Preference shares 40,000 Current liabilities Payable 50,000
Transcribed Image Text:The following information is available for Pind Co, a manufacturing company. You are provided with an extract from the Income Statement: Operating profit Interest charges 42,000 (16,000) PBT 26,000 Taxation (5,460) 20,540 Pind Co has an operating profit margin of 15%. You are provided with an extract from its Statement of Financial Position: $ Equity and reserves Total equity and reserves 420,000 Non current liabilities Loan 150,000 5% Preference shares 40,000 Current liabilities Payable 50,000
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