Question

Using the income statement for Times Mirror and Glass Co., compute the following ratios:
a. The interest coverage.
b. The fixed charge coverage.
The total assets for this company equal $80,000. Set up the equation for the Du Pont system of ratio analysis, and compute c, d, and e.
c. Profit margin.
d. Total asset turnover.
e. Return on assets (investment).
PASTE MANAGEMENT COMPANY
Sales $126,000
Less: Cost of goods sold 93,000
Gross profit 33,000
Less: Selling and administrative expense 11,000
Less: Lease expense 4,000
Operating profit* $ 18,000
Less: Interest expense 3,000
Earnings before taxes $ 15,000
Less: Taxes (30%) 4,500
Earnings after taxes $ 10,500



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  • CreatedOctober 14, 2014
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