Using the income statement for Times Mirror and Glass Co., compute the following ratios: TIMES MIRROR AND GLASS Co. Income Statement Sales Cost of goods sold Gross profit Selling and administrative expense Lease expense Operating profit* Interest expense Earnings before taxes Taxes (30%) Earnings after taxes *Equals income before interest and taxes. Interest coverage a.Compute the interest coverage ratio. (Round your answer to 2 decimal places.) times Fixed charge coverage $ 223,000 130,000 $ 93,000 44,000 19,100 $ 29,900 10,600 $ 19,300 7,720 $ 11,580 b.Compute the fixed charge coverage ratio. (Round your answer to 2 decimal places.) times
Using the income statement for Times Mirror and Glass Co., compute the following ratios: TIMES MIRROR AND GLASS Co. Income Statement Sales Cost of goods sold Gross profit Selling and administrative expense Lease expense Operating profit* Interest expense Earnings before taxes Taxes (30%) Earnings after taxes *Equals income before interest and taxes. Interest coverage a.Compute the interest coverage ratio. (Round your answer to 2 decimal places.) times Fixed charge coverage $ 223,000 130,000 $ 93,000 44,000 19,100 $ 29,900 10,600 $ 19,300 7,720 $ 11,580 b.Compute the fixed charge coverage ratio. (Round your answer to 2 decimal places.) times
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 32BEB
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![Using the income statement for Times Mirror and Glass Co., compute the following ratios:
TIMES MIRROR AND GLASS Co.
Income Statement
Sales
Cost of goods sold
Gross profit
Selling and administrative expense
Lease expense
Operating profit*
Interest expense
Earnings before taxes
Taxes (30%)
Earnings after taxes
*Equals income before interest and taxes.
a.Compute the interest
Interest coverage
ge ratio. (Round yo
times
$ 223,000
130,000
$
93,000
44,000
19,100
$ 29,900
10,600
times
$
19,300
7,720
$ 11,580
answer to 2 decimal places.)
b.Compute the fixed charge coverage ratio. (Round your answer to 2 decimal places.)
Fixed charge
coverage](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb6ab92fb-13ac-4828-9991-39a02ea26461%2Fa7137c3d-b0e2-46fe-b523-a467423de46a%2Ff4yvvub_processed.png&w=3840&q=75)
Transcribed Image Text:Using the income statement for Times Mirror and Glass Co., compute the following ratios:
TIMES MIRROR AND GLASS Co.
Income Statement
Sales
Cost of goods sold
Gross profit
Selling and administrative expense
Lease expense
Operating profit*
Interest expense
Earnings before taxes
Taxes (30%)
Earnings after taxes
*Equals income before interest and taxes.
a.Compute the interest
Interest coverage
ge ratio. (Round yo
times
$ 223,000
130,000
$
93,000
44,000
19,100
$ 29,900
10,600
times
$
19,300
7,720
$ 11,580
answer to 2 decimal places.)
b.Compute the fixed charge coverage ratio. (Round your answer to 2 decimal places.)
Fixed charge
coverage
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