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- Jun 17, 2010
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ABC Corporation’s income statement is given below.
Sales…………………………………$260,000
Cost of Goods Sold………………….. 145,000
Gross Profit……………………………115,000
Fixed Charges (other than interest)…… 25,000
Income before interest and taxes………..90,000
Interest…………………………………..30,000
Income before taxes……………………. 60,000
Taxes (35%)…………………………….. 21,000
Income after taxes……………………….$39,000
1) What is ABC's Time-Interest-Earned Ratio?
2) What is the Fixed-Charge-Coverage Ratio?
3) What is the Net Profit Margin?
4) What is the Gross Profit Margin?
Sales…………………………………$260,000
Cost of Goods Sold………………….. 145,000
Gross Profit……………………………115,000
Fixed Charges (other than interest)…… 25,000
Income before interest and taxes………..90,000
Interest…………………………………..30,000
Income before taxes……………………. 60,000
Taxes (35%)…………………………….. 21,000
Income after taxes……………………….$39,000
1) What is ABC's Time-Interest-Earned Ratio?
2) What is the Fixed-Charge-Coverage Ratio?
3) What is the Net Profit Margin?
4) What is the Gross Profit Margin?