
1.
Compute the time interest earned for Company M.
2.
Compute the time interest earned for Company W.
3.
Identify the effect of increase in sales by 30%, on each company’s net income.
4.
Identify the effect of increase in sales by 50%, on each company’s net income.
5.
Identify the effect of increase in sales by 80%, on each company’s net income.
6.
Identify the effect of decreases in sales by 10%, on each company’s net income.
7.
Identify the effect of decreases in sales by 20%, on each company’s net income.
8.
Identify the effect of decreases in sales by 40%, on each company’s net income.
9.
Comment on the results from requirement 3 through 8 in relation to the fixed-cost strategies of the two companies and the ratio values computed under requirement 1 and 2.

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Chapter 9 Solutions
Financial Accounting Fundamentals
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