For Magdalen Industries, compute the net income before taxes and net profit (or loss). Taxes for the

Question:

For Magdalen Industries, compute the net income before taxes and net profit (or loss). Taxes for the year were $1 million. Calculate the interest coverage and net profit ratio. Is the interest coverage acceptable?
Explain why or why not.
Magdalen Industries Data (millions)
Revenues
Total operating revenue (including sales of $48 million) .................. $51
Total nonoperating revenue .................................................... 35
Expenses.
Total operating expenses ....................................................... 70
Total nonoperating expenses (interest payments) .......................... 7
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...