Homework Answers
| Answer is D. 6 | ||||
| Explanation: | ||||
| Income before interest and taxes | 24000 | |||
| Divide: interest expenses | 4000 | |||
| Fixed charge coverage | 6 | |||
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49 50 32 Southpark, Inc. had income before interest and taxes of $24,000, paid $4,000 in...
When a firm has both interest expenses and lease payments, its times interest earned ratio Select...
When a firm has both interest expenses and lease payments, its times interest earned ratio Select one A. Will be smaller than its fixed charge coverage B. Will be greater than its fixed charge coverage cWill be equal to its fixed charge coverage D. Wis not be able to be determined Southpark Ind bad income before interest and taxes of $30,000, paid $4.000 in interest expense, and had $5,000 in operating lease expenses. What is the firm's fixed charge coverage...
Question 2 USF Inc., a firm in the travel business, reported earnings before interest and taxes...
Question 2 USF Inc., a firm in the travel business, reported earnings before interest and taxes of $60 million last year, but you have uncovered the following additional items of interest: 1. The firm had operating lease expenses of $50 million last year and has a commitment to make equivalent payments for the next 8 years. 2. The firm reported CAPEX of $30 million and depreciation of $50 million last year. The firm also made two acquisitions one funded with...
$175,500 6,000 4.700 32 33. NOODLES UNLIMITED, INC. Income Statement For the Year Ended December 31,...
$175,500 6,000 4.700 32 33. NOODLES UNLIMITED, INC. Income Statement For the Year Ended December 31, 20 Sales Revenue 37 Less: 38 Sales Discount Sales Returns and Allowances 40 Net Sales 41 Cost of Goods Sold 42 Gross Margin 43 Expenses: 44 Salaries and Wages Expense 45 Rent Expense 46 Utility Expense 47 Income from Operations 48 Interest Expense 49 Income before Income Tax Expense Income Tax Expense 164,800 67,700 97,100 25,900 24,000 13,800 33,400 1,600 31,800 7,700 30 2....
49 50 Question 42 The following information relates to MSF Corporation Not yet answered Finish atten...
49 50 Question 42 The following information relates to MSF Corporation Not yet answered Finish atten Sales revenue = $500,000 (10.000 units @ $50/unit) Variable costs of operations $200,000 (10,000 units @ $20/unit) Contribution margin $300,000 Fixed costs of operation $200,000 Operating income (EBIT) $100,000 Interest expense $50,000 Earnings before taxes (EBT) $50,000 Points out of Flag question What is MSF Corporation's degree of combined leverage (DCL) Select one: A. 2.0 O8.4.0 C. 6.0 D. 8.0
Nash Inc., a greeting card company, had the following statements prepared as of December 31, 2017....
Nash Inc., a greeting card company, had the following statements prepared as of December 31, 2017. NASH INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 Cash $6,000 $7,000 Accounts receivable 62,600 50,600 Short-term debt investments (available-for-sale) 35,200 18,100 Inventory 39,600 59,700 Prepaid rent 5,000 4,000 Equipment 152,800 128,900 Accumulated depreciation—equipment (34,900 ) (24,800 ) Copyrights 45,900 49,800 Total assets $312,200 $293,300 Accounts payable $45,900 $39,900 Income taxes payable 4,000 6,000 Salaries and wages payable 8,100...
Brecker Inc., a greeting card company, had the following statements prepared as of December 31, 2017....
Brecker Inc., a greeting card company, had the following statements prepared as of December 31, 2017. BRECKER INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 Cash $6,000 $7,000 Accounts receivable 62,000 51,000 Short-term debt investments (available-for-sale) 35,000 18,000 Inventory 40,000 60,000 Prepaid rent 5,000 4,000 Equipment 154,000 130,000 Accumulated depreciation—equipment (35,000 ) (25,000 ) Copyrights 46,000 50,000 Total assets $313,000 $295,000 Accounts payable $46,000 $40,000 Income taxes payable 4,000 6,000 Salaries and wages payable 8,000...
The following income statement and selected balance sheet account data are available for Treece, Inc., at...
The following income statement and selected balance sheet account data are available for Treece, Inc., at December 31, 2018. TREECE, INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2018 Revenue: Net sales $ 2,850,000 Dividend income 104,000 Interest income 70,000 Gain on sales of marketable securities 4,000 Total revenue and gains $ 3,028,000 Costs and expenses: Cost of goods sold $ 1,550,000 Operating expenses 980,000 Interest expense 185,000 Income tax expense 90,000 Total costs and expenses 2,805,000 Net income...
PLEASE NOTE: There is a typo in your book regarding the Times-Interest-Earned Ratio. The correct formula...
PLEASE NOTE: There is a typo in your book regarding the Times-Interest-Earned Ratio. The correct formula is EBIT/Interest Expense. Complete a debt analysis for this company. * Calculate AND interpret the debt ratio, the times-interest-earned ratio, the fixed-payment coverage ratio * Make a credit decision. Based on the loan request and on your analysis, would you approve or deny the loan request? As always, show ALL of your work. P3-18 Debt analysis Springfield Bank is evaluating Creek Enterprises, which has...
P3-19 Common-size statement analysis A common-size income statement for Creek Enterprises 2018 operations follows. Using the...
P3-19 Common-size statement analysis A common-size income statement for Creek Enterprises 2018 operations follows. Using the firm's 2019 income statement presented in Problem 3-16, develop the 2019 common-size income statement and compare it with the 2018 statement. Which areas require further analysis and investigation? Creek Enterprises Common-Size Income Statement for the Year Ended December 31, 2018 100.0% 65.9 34.1% Sales revenue ($35,000,000) Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrative expenses Lease expense...
Flint Inc., a greeting card company, had the following statements prepared as of December 31, 2017....
Flint Inc., a greeting card company, had the following statements prepared as of December 31, 2017. FLINT INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 Cash $6,100 $6,900 Accounts receivable 61,900 50,500 Short-term debt investments (available-for-sale) 34,800 18,200 Inventory 39,900 59,800 Prepaid rent 4,900 4,000 Equipment 155,500 131,200 Accumulated depreciation equipment (34,800) (25,300 ) Copyrights 45,700 50,200 Total assets $314,000 $295,500 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans...
When a firm has both interest expenses and lease payments, its times interest earned ratio Select one A. Will be smaller than its fixed charge coverage B. Will be greater than its fixed charge coverage cWill be equal to its fixed charge coverage D. Wis not be able to be determined Southpark Ind bad income before interest and taxes of $30,000, paid $4.000 in interest expense, and had $5,000 in operating lease expenses. What is the firm's fixed charge coverage...
Question 2 USF Inc., a firm in the travel business, reported earnings before interest and taxes of $60 million last year, but you have uncovered the following additional items of interest: 1. The firm had operating lease expenses of $50 million last year and has a commitment to make equivalent payments for the next 8 years. 2. The firm reported CAPEX of $30 million and depreciation of $50 million last year. The firm also made two acquisitions one funded with...
$175,500 6,000 4.700 32 33. NOODLES UNLIMITED, INC. Income Statement For the Year Ended December 31, 20 Sales Revenue 37 Less: 38 Sales Discount Sales Returns and Allowances 40 Net Sales 41 Cost of Goods Sold 42 Gross Margin 43 Expenses: 44 Salaries and Wages Expense 45 Rent Expense 46 Utility Expense 47 Income from Operations 48 Interest Expense 49 Income before Income Tax Expense Income Tax Expense 164,800 67,700 97,100 25,900 24,000 13,800 33,400 1,600 31,800 7,700 30 2....
49 50 Question 42 The following information relates to MSF Corporation Not yet answered Finish atten Sales revenue = $500,000 (10.000 units @ $50/unit) Variable costs of operations $200,000 (10,000 units @ $20/unit) Contribution margin $300,000 Fixed costs of operation $200,000 Operating income (EBIT) $100,000 Interest expense $50,000 Earnings before taxes (EBT) $50,000 Points out of Flag question What is MSF Corporation's degree of combined leverage (DCL) Select one: A. 2.0 O8.4.0 C. 6.0 D. 8.0
PLEASE NOTE: There is a typo in your book regarding the Times-Interest-Earned Ratio. The correct formula is EBIT/Interest Expense. Complete a debt analysis for this company. * Calculate AND interpret the debt ratio, the times-interest-earned ratio, the fixed-payment coverage ratio * Make a credit decision. Based on the loan request and on your analysis, would you approve or deny the loan request? As always, show ALL of your work. P3-18 Debt analysis Springfield Bank is evaluating Creek Enterprises, which has...
P3-19 Common-size statement analysis A common-size income statement for Creek Enterprises 2018 operations follows. Using the firm's 2019 income statement presented in Problem 3-16, develop the 2019 common-size income statement and compare it with the 2018 statement. Which areas require further analysis and investigation? Creek Enterprises Common-Size Income Statement for the Year Ended December 31, 2018 100.0% 65.9 34.1% Sales revenue ($35,000,000) Less: Cost of goods sold Gross profits Less: Operating expenses Selling expense General and administrative expenses Lease expense...
Flint Inc., a greeting card company, had the following statements prepared as of December 31, 2017. FLINT INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 Cash $6,100 $6,900 Accounts receivable 61,900 50,500 Short-term debt investments (available-for-sale) 34,800 18,200 Inventory 39,900 59,800 Prepaid rent 4,900 4,000 Equipment 155,500 131,200 Accumulated depreciation equipment (34,800) (25,300 ) Copyrights 45,700 50,200 Total assets $314,000 $295,500 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans...
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