Using the income statement for Times Mirror and Glass Co., compute the following ratios:
TIMES MIRROR AND GLASS Co.
Income Statement Sales $ 221,000 Cost of goods sold 113,000 Gross profit $ 108,000 Selling and administrative expense 43,700 Lease expense 11,900 Operating profit* $ 52,400 Interest expense 7,100 Earnings before taxes $ 45,300 Taxes (30%) 18,120 Earnings after taxes $ 27,180
*Equals income before interest and taxes.
a. Compute the interest coverage ratio. (Round your answer to 2 decimal places.)
b. Compute the fixed charge coverage ratio. (Round your answer to 2 decimal places.) The total assets for this company equal $162,000. Set up the equation for the Du Pont system of ratio analysis.
c. Compute the profit margin ratio. (Input your answer as a percent rounded to 2 decimal places.) d.Compute the total asset turnover ratio. (Round your answer to 2 decimal places.)
e. Compute the return on assets (investment). (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
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