(a) Introduction: Time interest earned ratio measure the ability of the company to meet its obligations of debt. It is the ratio of operating income to interest expense. To state: If increase in time interest earned ratio is a good or bad news for the company.

Question

Want to see the full answer?

Answer 1

Question

Chapter 13, Problem 12ME

To determine

(a)

Introduction:

Time interest earned ratio measure the ability of the company to meet its obligations of debt. It is the ratio of operating income to interest expense.

To state:

If increase in time interest earned ratio is a good or bad news for the company.

To determine

(b)

Introduction:

The average days to sell inventory measures the number of days company takes to convert its inventory into assets.

To state:

If decrease in days to sell is a good or bad news for the company

To determine

(c)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

If increase in gross profit percentage is a good or bad news for the company

To determine

(d)

Introduction:

Earnings per share (EPS) is profit of the company which isdividedby common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

If decrease in EPS is a good or bad news for the company

To determine

(e)

Introduction:

Fixed Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To state:

If increase in fixed asset turnover ratio is a good or bad news for the company

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

None

Financial accounting

Financial Accounting question

Answer 2

Question

Chapter 13, Problem 12ME

To determine

(a)

Introduction:

Time interest earned ratio measure the ability of the company to meet its obligations of debt. It is the ratio of operating income to interest expense.

To state:

If increase in time interest earned ratio is a good or bad news for the company.

To determine

(b)

Introduction:

The average days to sell inventory measures the number of days company takes to convert its inventory into assets.

To state:

If decrease in days to sell is a good or bad news for the company

To determine

(c)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

If increase in gross profit percentage is a good or bad news for the company

To determine

(d)

Introduction:

Earnings per share (EPS) is profit of the company which isdividedby common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

If decrease in EPS is a good or bad news for the company

To determine

(e)

Introduction:

Fixed Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To state:

If increase in fixed asset turnover ratio is a good or bad news for the company

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 13, Problem 12ME

To determine

(a)

Introduction:

Time interest earned ratio measure the ability of the company to meet its obligations of debt. It is the ratio of operating income to interest expense.

To state:

If increase in time interest earned ratio is a good or bad news for the company.

To determine

(b)

Introduction:

The average days to sell inventory measures the number of days company takes to convert its inventory into assets.

To state:

If decrease in days to sell is a good or bad news for the company

To determine

(c)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

If increase in gross profit percentage is a good or bad news for the company

To determine

(d)

Introduction:

Earnings per share (EPS) is profit of the company which isdividedby common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

If decrease in EPS is a good or bad news for the company

To determine

(e)

Introduction:

Fixed Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To state:

If increase in fixed asset turnover ratio is a good or bad news for the company

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 13, Problem 12ME

To determine

(a)

Introduction:

Time interest earned ratio measure the ability of the company to meet its obligations of debt. It is the ratio of operating income to interest expense.

To state:

If increase in time interest earned ratio is a good or bad news for the company.

To determine

(b)

Introduction:

The average days to sell inventory measures the number of days company takes to convert its inventory into assets.

To state:

If decrease in days to sell is a good or bad news for the company

To determine

(c)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

If increase in gross profit percentage is a good or bad news for the company

To determine

(d)

Introduction:

Earnings per share (EPS) is profit of the company which isdividedby common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

If decrease in EPS is a good or bad news for the company

To determine

(e)

Introduction:

Fixed Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To state:

If increase in fixed asset turnover ratio is a good or bad news for the company

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 13, Problem 12ME

To determine

(a)

Introduction:

Time interest earned ratio measure the ability of the company to meet its obligations of debt. It is the ratio of operating income to interest expense.

To state:

If increase in time interest earned ratio is a good or bad news for the company.

To determine

(b)

Introduction:

The average days to sell inventory measures the number of days company takes to convert its inventory into assets.

To state:

If decrease in days to sell is a good or bad news for the company

To determine

(c)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

If increase in gross profit percentage is a good or bad news for the company

To determine

(d)

Introduction:

Earnings per share (EPS) is profit of the company which isdividedby common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

If decrease in EPS is a good or bad news for the company

To determine

(e)

Introduction:

Fixed Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To state:

If increase in fixed asset turnover ratio is a good or bad news for the company

Answer 6

Chapter 13, Problem 12ME

To determine

(a)

Introduction:

Time interest earned ratio measure the ability of the company to meet its obligations of debt. It is the ratio of operating income to interest expense.

To state:

If increase in time interest earned ratio is a good or bad news for the company.

Answer 7

Chapter 13, Problem 12ME

To determine

(a)

Introduction:

Time interest earned ratio measure the ability of the company to meet its obligations of debt. It is the ratio of operating income to interest expense.

To state:

If increase in time interest earned ratio is a good or bad news for the company.

Answer 8

To determine

(b)

Introduction:

The average days to sell inventory measures the number of days company takes to convert its inventory into assets.

To state:

If decrease in days to sell is a good or bad news for the company

Answer 9

To determine

(b)

Introduction:

The average days to sell inventory measures the number of days company takes to convert its inventory into assets.

To state:

If decrease in days to sell is a good or bad news for the company

Answer 10

To determine

(c)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

If increase in gross profit percentage is a good or bad news for the company

Answer 11

To determine

(c)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

If increase in gross profit percentage is a good or bad news for the company

Answer 12

To determine

(d)

Introduction:

Earnings per share (EPS) is profit of the company which isdividedby common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

If decrease in EPS is a good or bad news for the company

Answer 13

To determine

(d)

Introduction:

Earnings per share (EPS) is profit of the company which isdividedby common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

If decrease in EPS is a good or bad news for the company

Answer 14

To determine

(e)

Introduction:

Fixed Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To state:

If increase in fixed asset turnover ratio is a good or bad news for the company

Answer 15

To determine

(e)

Introduction:

Fixed Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets.

To state:

If increase in fixed asset turnover ratio is a good or bad news for the company

Answer 16

Expert Solution & Answer

Answer 17

Expert Solution & Answer

Answer 18

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 19

Ch. 13 - Prob. 1Q Ch. 13 - Prob. 2Q Ch. 13 - What is ratio analysis? Why is it useful? Ch. 13 - What benchmarks are commonly used for interpreting...Ch. 13 - Prob. 5Q Ch. 13 - Why are some analyses called horizontal and others...Ch. 13 - Slow Cellar’s current ratio increased from 1.2 to...Ch. 13 - From last year to this year. Colossal Company’s...Ch. 13 - From last year to this year, Berry Barn reported...Ch. 13 - Prob. 10Q

(a) Introduction: Time interest earned ratio measure the ability of the company to meet its obligations of debt. It is the ratio of operating income to interest expense. To state: If increase in time interest earned ratio is a good or bad news for the company.

Solution Summary: The author explains how time interest earned ratio measures the ability of a company to meet its obligations of debt.

Videos

(a)

Introduction:

Time interest earned ratio measure the ability of the company to meet its obligations of debt. It is the ratio of operating income to interest expense.

To state:

If increase in time interest earned ratio is a good or bad news for the company.

(b)

Introduction:

The average days to sell inventory measures the number of days company takes to convert its inventory into assets.

To state:

If decrease in days to sell is a good or bad news for the company

(c)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

If increase in gross profit percentage is a good or bad news for the company

(d)

Introduction:

Earnings per share (EPS) is profit of the company which isdividedby common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

If decrease in EPS is a good or bad news for the company

Want to see the full answer?

Chapter 13 Solutions

(a) Introduction: Time interest earned ratio measure the ability of the company to meet its obligations of debt. It is the ratio of operating income to interest expense. To state: If increase in time interest earned ratio is a good or bad news for the company.

Solution Summary: The author explains how time interest earned ratio measures the ability of a company to meet its obligations of debt.

Videos

(a) Introduction: Time interest earned ratio measure the ability of the company to meet its obligations of debt. It is the ratio of operating income to interest expense. To state: If increase in time interest earned ratio is a good or bad news for the company.

(b) Introduction: The average days to sell inventory measures the number of days company takes to convert its inventory into assets. To state: If decrease in days to sell is a good or bad news for the company

(c) Introduction: Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory. To state: If increase in gross profit percentage is a good or bad news for the company

(d) Introduction: Earnings per share (EPS) is profit of the company which isdividedby common stock per share. Earnings per share acts as an indicator of a company's profitability. To state: If decrease in EPS is a good or bad news for the company

(e) Introduction: Fixed Asset turnover ratio calculates the ability of a company to generate sales with the fixed assets. A decline in the ratio means company has overinvested the amount in the fixed assets. To state: If increase in fixed asset turnover ratio is a good or bad news for the company

Want to see the full answer?

Chapter 13 Solutions

(a)

Introduction:

Time interest earned ratio measure the ability of the company to meet its obligations of debt. It is the ratio of operating income to interest expense.

To state:

If increase in time interest earned ratio is a good or bad news for the company.

(b)

Introduction:

The average days to sell inventory measures the number of days company takes to convert its inventory into assets.

To state:

If decrease in days to sell is a good or bad news for the company

(c)

Introduction:

Gross profit percentage helps the company to compare gross margin to the net sales. This ratio tells the profitability at which company sells its inventory.

To state:

If increase in gross profit percentage is a good or bad news for the company

(d)

Introduction:

Earnings per share (EPS) is profit of the company which isdividedby common stock per share. Earnings per share acts as an indicator of a company's profitability.

To state:

If decrease in EPS is a good or bad news for the company