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