Homework Answers
|
Times Interest earned ratio |
||||||
|
Company |
Choose Numerator |
/ |
Choose Denominator |
= |
Ratio |
|
|
Income before interest and taxes |
/ |
Interest expenses |
= |
|||
|
a. |
$155,000 |
/ |
62,000 |
= |
2.50 |
times |
|
b. |
161,296 |
/ |
35,580 |
= |
4.53 |
times |
|
c. |
188,108 |
/ |
7,626 |
= |
24.67 |
times |
|
d. |
149,668 |
/ |
25,296 |
= |
5.92 |
times |
|
e. |
111,228 |
/ |
7,254 |
= |
15.33 |
times |
|
f. |
-34,720 |
/ |
75,690 |
= |
-0.46 |
times |
Working notes:
|
Net Income |
Taxes |
Income before interest and taxes |
|
$124,000 |
31,000 |
$155,000 |
|
118,600 |
42,696 |
161,296 |
|
127,100 |
61,008 |
188,108 |
|
105,400 |
44,268 |
149,668 |
|
80,600 |
30,628 |
111,228 |
|
(34,720) |
0 |
-34,720 |
-
Company C has the strongest ability to pay interest expenses as it becomes due.
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Use the following information from separate companies a through c. Net Income (Loss) $171,000 165,600 145, 350 174,100 Interest Expense $70, 110 19,872 53,780 8,705 Income Taxes $42,750 59,616 61,047 83,568 Compute times interest earned. Which company indicates the strongest ability to pay interest expense as it comes due? Times Interest Earned Ratio Interest Coverage Compute times interest earned. Times Interest Earned Ratio Company Choose Numerator: Ratio 1 = times Choose Denominator: Interest expense 70,110 19,872 53,780 8,705 times =...
Use the following information from separate companies a through Net Income (LOSS) $196, eee 109,689 109, 10e 90, 180 68,900 (29,680) Interest Expense $57,240 16, e96 5,455 35,139 10,335 58,470 Income Taxes $26,58 36,216 52,368 37.842 26,182 1. Compute times interest earned. 2. Which company indicates the strongest ability to pay interest expense as it comes due? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute times interest earned. Times Interest Eamed Ratio...
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requirea information Exercise 13-9 Risk and capital structure analysis LO P3 The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. 2017 2016 2015 At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 26,279 $ 30,410 $ 31,367 75,402 52,681 40,580...
Exercise 13-9 Risk and capital structure analysis LO P3 The following information applies to the questions displayed below) Simon Company's year-end balance sheets follow. 2017 2016 2015 At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 28,642 $ 31,838 $ 32,853 80,570 56,29145, 131 101,302 74,385...
Exercise 4-13 Computing the current ratio LO A1 Use the information in the following adjusted trial balance for the Wilson Trucking Company. Credit Debit $ 6,400 16,500 2,000 154,000 $ 31,724 75,000 Account Title Cash Accounts receivable Office supplies Trucks Accumulated depreciation-Trucks Land Accounts payable Interest payable Long-term notes payable K. Wilson, Capital K. Wilson, Withdrawals Trucking fees earned Depreciation expense-Trucks Salaries expense office supplies expense Repairs expense-Trucks Totals 10,400 3,000 52,000 149,634 19,000 119,500 20, 462 56,046 6,573 10,277...
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