The Simmons Corporation's income statement is given below. a. What is the times interest earned ratio? b.

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The Simmons Corporation's income statement is given below.
a. What is the times interest earned ratio?
b. What would be the fixed charge coverage ratio?

SIMMONS CORPORATION
Sales..........................................................$200,000
Cost of goods sold .... .. .. .. .. . ....... . .. .. . .116,000
Gross profit. ........................ . .......................84,000
Fixed charges (other than interest)................24,000
Income before interest and taxes...................60,000
Interest ............................... .. .. . ...................12,000
Income before taxes .... . .. .. .. . ........ .. .. . ....48,000
Taxes ................. ............................................24,000
Income after taxes........................................$ 24,000.

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Related Book For  answer-question

Foundations of Financial Management

ISBN: 978-1259024979

10th Canadian edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

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