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1.
Compute the time interest earned for Company E.
2.
Compute the time interest earned for Company S.
3.
Identify the effect of increase in sales by 10%, on each company’s net income.
4.
Identify the effect of increase in sales by 40%, on each company’s net income.
5.
Identify the effect of increase in sales by 90%, on each company’s net income.
6.
Identify the effect of decreases in sales by 20%, on each company’s net income.
7.
Identify the effect of decreases in sales by 50%, on each company’s net income.
8.
Identify the effect of decreases in sales by 80%, 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:
- E3.20 (Appendix 3A) Converting Indirect Method Cash Flows to Direct Method Cash Flows. The Burnet Corporation disclosed the following statement of earnings in its current annual report (amounts in thousands): Earnings Statement Revenues Cost of goods sold Gross margin Depreciation and amortization expense Selling, general and administrative expenses Operating income. Unusual gain on sale of land Net income.. Current Year $2,430 (1,200) 1,230 (260) (240) 730 70 $ 800 In addition, the company reported the following data regarding its operating cash flow in its year-end statement of cash flow (amounts in thousands): TA 6 SALSHAN Ona af (Indirect Method) Operating activities Net income Statement of Cash Flow Depreciation and amortization expense Accounts receivable Inventory.. Accounts payable Gain on sale of land Cash flow from operating activities. Current Year $800 260 (250) (5) 50 (70) $785 Using the above information for the current year, construct the Burnet Corporation's cash flow…arrow_forwardNeed help this question solutionarrow_forwardIno Pharmaceuticals is evaluating its Vioxx division, an investment center. The division has a $68,000 controllable margin and $450,000 of sales. How much will Ino's average operating assets be when its return on investment is 10%?arrow_forward
- Carlisle Industries has a cash cycle of 50.2 days, an operating cycle of 74 days, and an inventory period of 33 days. The company reported cost of goods sold in the amount of $392,000, and credit sales were $620,000. What is the company's average balance in accounts payable and accounts receivable?arrow_forwardPlease given answer general accountingarrow_forwardPlease give me true answer this financial accounting questionarrow_forward
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