All Related Questions of Coverage Ratio

Q: Titan Inc.’s net income for the most recent year was

Titan Inc.’s net income for the most recent year was $8,320. The tax rate was 34 percent. The firm paid $1,940 in total interest expense and deducted $2,730 in depreciation expense. What was Titan’s c...

Q: Aero Inc. had the following statement of financial position at the

Aero Inc. had the following statement of financial position at the end of operations for 2013: During 2014, the following occurred: 1. Aero liquidated its investment portfolio at a loss of $5,000. The...

Q: Use the information in E5-14 for Carmichael Industries.

Use the information in E5-14 for Carmichael Industries. Information from E5-14o Instructions (a) Calculate the current and acid test ratios for 2013 and 2014. (b) Calculate Carmichael's current cash...

Q: You are analyzing the leverage of two firms and you note the

You are analyzing the leverage of two firms and you note the following (all values in millions of dollars): a. What is the market debt-to-equity ratio of each firm? b. What is the book debt-to-equity...

Q: Hess Corporation is a global energy company that explores, produces,

Hess Corporation is a global energy company that explores, produces, refines, and markets crude oil and natural gas. The capitalization of interest associated with self-constructed assets was discusse...

Q: Identify the assumptions underlying the interest coverage ratio needed to make it

Identify the assumptions underlying the interest coverage ratio needed to make it an appropriate measure for analyzing long-term solvency risk.

Q: In what sense is the interest coverage ratio more a measure for

In what sense is the interest coverage ratio more a measure for assessing short-term liquidity risk than it is a measure for assessing long-term solvency risk?

Q: Refer to the financial statement forecasts for Massachusetts Stove Company (MSC

Refer to the financial statement forecasts for Massachusetts Stove Company (MSC) prepared for Case 10.2. The management of MSC wants to know the equity valuation implications of adding gas stoves unde...

Q: Refer to the projected financial statements for Massachusetts Stove Company (MSC

Refer to the projected financial statements for Massachusetts Stove Company (MSC) prepared for Case 10.2. The management of MSC wants to know the equity valuation implications of not adding gas stoves...

Q: Sun Microsystems, Inc., develops, manufactures, and sells computers

Sun Microsystems, Inc., develops, manufactures, and sells computers for network systems. Exhibit 5.21 presents selected financial data for Sun Microsystems for each of the five years ending June 30, 2...

Q: Refer to the financial statement data for Hasbro in Problem 4.

Refer to the financial statement data for Hasbro in Problem 4.24 in Chapter 4. Exhibit 5.15 presents risk ratios for Hasbro for Year 2 and Year 3. Financial statement data for Hasbro from Problem 4.2...

Q: Refer to the profitability ratios of Coca-Cola in Problem 4

Refer to the profitability ratios of Coca-Cola in Problem 4.26. Exhibit 5.17 presents risk ratios for Coca-Cola for 2006–2008. As we did within the chapter for PepsiCo, we utilize Co...

Q: Delta Air Lines, Inc., is one of the largest airlines

Delta Air Lines, Inc., is one of the largest airlines in the United States. It has operated on the verge of bankruptcy for several years. Exhibit 5.18 presents selected financial data for Delta Air Li...

Q: Match each ratio or percentage with its computation. /

Match each ratio or percentage with its computation.

Q: Let’s look at Dick’s Sporting Goods (Dick’s) some more.

Let’s look at Dick’s Sporting Goods (Dick’s) some more. Think about Dick’s. What liabilities might Dick’s have in order to finance its operations? Return to Dick’s Annual Report and look at Dick’s fin...

Q: Define each of the following terms: a. Liquidity ratios:

Define each of the following terms: a. Liquidity ratios: current ratio; quick, or acid test, ratio b. Asset management ratios: inventory turnover ratio; days sales outstanding (DSO); fixed assets turn...

Q: What does the loan loss coverage ratio measure?

What does the loan loss coverage ratio measure?

Q: Chris Guthrie was recently hired by S&S Air, Inc

Chris Guthrie was recently hired by S&S Air, Inc., to assist the company with its financial planning and to evaluate the company’s performance. Chris graduated from college five...

Q: Sherwood Inc.’s net income for the most recent year was

Sherwood Inc.’s net income for the most recent year was $13,168. The tax rate was 34 percent. The firm paid $3,605 in total interest expense and deducted $2,382 in depreciation expense. What was the c...

Q: Find the following financial ratios for Smolira Golf Corp. (use

Find the following financial ratios for Smolira Golf Corp. (use year-end figures rather than average values where appropriate): Short-term solvency ratios: a. Current ratio...

Q: Match each ratio or percentage with its computation. /

Match each ratio or percentage with its computation.

Q: Company X and Company Y are two giants of the retail industry

Company X and Company Y are two giants of the retail industry. Both offer full lines of moderately priced merchandise. In the last fiscal year, annual sales for Company X totaled $53 billion and annua...

Q: Match each ratio or percentage with its computation. /

Match each ratio or percentage with its computation.

Q: Company X and Company Y are two giants of the retail industry

Company X and Company Y are two giants of the retail industry. Both offer full lines of moderately priced merchandise. In the last fiscal year, annual sales for Company X totaled $53 billion and annua...

Q: Aero Inc. had the following balance sheet at December 31,

Aero Inc. had the following balance sheet at December 31, 2011. During 2012, the following occurred. 1. Aero liquidated its available-for-sale investment portfolio at a loss of $5,000. 2. A tract of...

Q: A. Using average balance sheet account data, calculate the

A. Using average balance sheet account data, calculate the (a) current ratio, (b) quick ratio, (c) total-debt-to-total-assets ratio, and (d) the interest coverage ratio for 2016. B. Repeat the rat...

Q: As your first week at Henley Manufacturing Inc. draws to a

As your first week at Henley Manufacturing Inc. draws to a close, you find a memorandum on your desk from the company’s CEO. The memo outlines sales and earnings goals for next year: Sales are expecte...

Q: Panda Inc.’s net income for the most recent year was

Panda Inc.’s net income for the most recent year was $9,620. The tax rate was 34 percent. The firm paid $2,380 in total interest expense and deducted $3,170 in depreciation expense. What was the compa...

Q: Calculate the cash flow coverage ratio based on the following information:

Calculate the cash flow coverage ratio based on the following information: EBIT = $540,000; depreciation and amortization = $65,000; interest payments = $180,000; principal repayment = $75,000; and ta...

Q: IOU Inc. has EBIT of $58,000, depreciation

IOU Inc. has EBIT of $58,000, depreciation and amortization of $12,000, interest expenses of $21,000, principal repayments of $17,000, and a tax rate of 35 percent. Calculate IOU Inc.’s interest cover...

Q: Arbortech, a designer, manufacturer, and marketer of PC cards

Arbortech, a designer, manufacturer, and marketer of PC cards for computers, printers, telecommunications equipment, and equipment diagnostic systems, was the darling of Wall Street during Year 6. Its...

Q: The first decade of the 21st century witnessed a flurry of losses

The first decade of the 21st century witnessed a flurry of losses, bankruptcies, acquisitions, and strategic partnerships in the airline industry. The heavily levered firms in the industry are particu...

Q: Refer to the financial statement data for Hasbro in Problem 4.

Refer to the financial statement data for Hasbro in Problem 4.24 in Chapter 4. Exhibit 5.14 presents risk ratios for Hasbro for Year 2 and Year 3. Financial statement in 4.24: Exhibit 5.14: REQUI...

Q: Exhibit 5.16 presents risk ratios for Coca-Cola for

Exhibit 5.16 presents risk ratios for Coca-Cola for Year 1 through Year 3. Exhibit 5.16: REQUIRED: a. Assess the changes in the short-term liquidity risk of Coca-Cola between Year 1 and Year 3. b....

Q: Delta Air Lines, Inc., is one of the largest airlines

Delta Air Lines, Inc., is one of the largest airlines in the United States. It has operated on the verge of bankruptcy for several years. Exhibit 5.17 presents selected financial data for Delta Air Li...

Q: Sun Microsystems, Inc., develops, manufactures, and sells computers

Sun Microsystems, Inc., develops, manufactures, and sells computers for network systems. Exhibit 5.20 presents selected financial data for Sun Microsystems for each of the five years ending June 30, Y...

Q: Exhibit 5.26 presents risk ratios for Walmart for 2014 and

Exhibit 5.26 presents risk ratios for Walmart for 2014 and 2013. Exhibits 1.19, 1.20, and 1.21 in Chapter 1 present the financial statements for Walmart. REQUIRED: a. Compute the values of each of th...

Q: Sunny Day Stores operates convenience stores throughout much of the United States

Sunny Day Stores operates convenience stores throughout much of the United States. The industry is highly competitive, with low profit margins. The company’s competition includes nat...

Q: To meet the increasing demand for its microprocessors, Intelligent Micro Devices

To meet the increasing demand for its microprocessors, Intelligent Micro Devices began construction of a new manufacturing facility on January 1, 2017. Construction costs were incurred uniformly throu...

Q: AT&T Wireless Services was once one of the largest wireless

AT&T Wireless Services was once one of the largest wireless communication—think “cell phones”—service providers in the Unite...

Q: Madison Corp. reported the following in the Current Assets section of

Madison Corp. reported the following in the Current Assets section of its comparative balance sheets: Supplemental information at the bottom of Madison’s 2017 statement of cash flo...

Q: The following information is available from the balance sheets at the ends

The following information is available from the balance sheets at the ends of the two most recent years and the income statement for the most recent year of Impact Company: 2017 Sales revenue â...

Q: Scantania is a Swedish company that manufactures trucks and other heavy vehicles

Scantania is a Swedish company that manufactures trucks and other heavy vehicles and provides financing for its customers’ purchases. Exhibit 7.27 presents financial statement ratios...

Q: Effective financial statement analysis requires an understanding of a firm’s economic characteristics

Effective financial statement analysis requires an understanding of a firm’s economic characteristics. The relations among various financial statement items provide evidence of many...

Q: Data taken from the financial statements of Kyoto Electric, a Japanese

Data taken from the financial statements of Kyoto Electric, a Japanese generator and provider of electric services, appear below (amounts in billions of Japanese yen). a. Compute the long-term debt...

Q: Data taken from the financial statements of Arctagon, a steel manufacturer

Data taken from the financial statements of Arctagon, a steel manufacturer headquartered in the Netherlands, appear below (amounts in millions of euros). Arctagon acquired other steel companies during...

Q: Amalgamated Engineering plc makes specialized machinery for several industries. In recent

Amalgamated Engineering plc makes specialized machinery for several industries. In recent years, the company has faced severe competition from overseas businesses, and its sales volume has hardly chan...

Q: Calculate the debt ratio, times interest earned ratio, and cash

Calculate the debt ratio, times interest earned ratio, and cash coverage ratio for 2013 and 2014 for Tyler Toys. Should any of these ratios or the change in a ratio warrant concern for the managers of...

Q: Pop Evil Inc.’s net income for the most recent year

Pop Evil Inc.’s net income for the most recent year was $16,481. The tax rate was 34 percent. The firm paid $3,681 in total interest expense and deducted $4,385 in depreciation expense. What was the c...

Q: What advantage does the fixed charge coverage ratio offer over simply using

What advantage does the fixed charge coverage ratio offer over simply using times interest earned?

Q: Collingwood Corp. has a revolving line of credit on which it

Collingwood Corp. has a revolving line of credit on which it owes $25 million. One of the restrictions imposed with this financing arrangement is that the company must maintain a minimum interest cove...

Q: Given the following financial statements, historical ratios, and industry averages

Given the following financial statements, historical ratios, and industry averages, calculate Sterling Company’s financial ratios for the most recent year. (Assume a 365-day year.)...

Q: Use the information in E5-14 for Carmichael Industries.

Use the information in E5-14 for Carmichael Industries. Instructions: (a) Calculate the current and acid test ratios for 2016 and 2017. (b) Calculate Carmichael’s current cash debt...

Q: Use the information in E5-17 for Dropafix Inc.

Use the information in E5-17 for Dropafix Inc. Instructions: (a) Calculate the current and acid test ratios for 2016 and 2017. (b) Calculate Dropafix’s current cash debt coverage ra...

Q: Aero Inc. had the following statement of financial position at the

Aero Inc. had the following statement of financial position at the end of operations for 2016: During 2017, the following occurred: 1. Aero liquidated its FV-NI investments portfolio at a loss of $5...

Q: See Table 2.5 showing financial statement data and stock price

See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. By how much did Mydeco increase its debt from 2012 to 2016? b. What was Mydeco’s EBITDA/Interest coverage ratio...

Q: You are analyzing the leverage of two firms and you note the

You are analyzing the leverage of two firms and you note the following (all values in millions of dollars): a. What is the market debt-to-equity ratio of each firm? b. What is the book debt-to-equit...

Q: 1. What is DuPont analysis? a. A specialized

1. What is DuPont analysis? a. A specialized set of financial ratios. b. Financial ratio analysis for chemical firms. c. It separates profitability ratios into component parts. d. It relates chang...

Q: The following information (in $000) has been obtained from

The following information (in $000) has been obtained from Patinka Limited’s financial statements for the fiscal years ended December 31. There are no preferred shares issued by Pa...

Q: Data for Malouin Corp. are presented in E22-12.

Data for Malouin Corp. are presented in E22-12. Instructions: Prepare the operating activities section of the statement of cash flows using the indirect method. Data from E22-12: Malouin Corp.&acir...

Q: Malouin Corp.’s income statement for the year ended December 31

Malouin Corp.’s income statement for the year ended December 31, 2017 had the following condensed information: There were no purchases or sales of trading (FV-NI) investments durin...

Q: If a management team wishes to boost the company's stock price,

If a management team wishes to boost the company's stock price, then it should consider pursuing actions to meet or beat the annual investor-expected EPS targets, raising the company's a. dividend ea...

Q: Malouin Corp.'s income statement for the year ended December 31

Malouin Corp.'s income statement for the year ended December 31, 2020, had the following condensed information: There were no purchases or sales of trading (FV-NI) investments during 2020. Malouin's...

Q: The following information (in $000) has been obtained from

The following information (in $000) has been obtained from Patinka Limited's financial statements for the fiscal years ended December 31. There were no preferred shares issued by Patinka nor were the...

Q: Fit and Fantastic Ltd produces and sells a range of fitness equipment

Fit and Fantastic Ltd produces and sells a range of fitness equipment. Its capital expenditure for the current year for new plant was $600 000 and dividends paid were $80 000. Current liabilities and...

Q: Fresh Food Catering Ltd’s capital expenditure for the current year on new

Fresh Food Catering Ltd’s capital expenditure for the current year on new equipment was $196 900. Current liabilities and non-current liabilities were $98 590 and $732 800 respectively. Sales for the...

Q: Information for Fred and Ginger’s Dance Pty Ltd has been extracted from

Information for Fred and Ginger’s Dance Pty Ltd has been extracted from its financial statements and is presented below. Information relating to the year ended 30 June 2020 is as fo...

Q: Let’s examine Dick’s Sporting Goods (Dick’s) again. Think about

Let’s examine Dick’s Sporting Goods (Dick’s) again. Think about Dick’s. What liabilities might Dick’s need to finance its operations? Return to Dick’s Annual Report and look at the financial statement...

Q: Appleway Supply had the following balances as of December 31, 2018

Appleway Supply had the following balances as of December 31, 2018: Total Current Assets............................................................................................. $ 122,000 Total L...

Q: Country Supply had the following balances as of December 31, 2018

Country Supply had the following balances as of December 31, 2018: Total Current Assets............................................................................................ $ 181,000 Total Lon...

Q: The classified balance sheet and selected income statement data for Shreveport Auto

The classified balance sheet and selected income statement data for Shreveport Auto, Inc., as of December 31, 2018, are presented next. Requirements 1. Calculate Shreveport Auto, Inc.â€&#...

Q: The classified balance sheet and selected income statement data for Amarillo Auto

The classified balance sheet and selected income statement data for Amarillo Auto Supply, Inc., as of December 31, 2018, are presented next. Requirements 1. Calculate Amarillo Auto Supplyâ
...

Q: Whipporwill, Inc.’s, net income for the most recent

Whipporwill, Inc.’s, net income for the most recent year was $19,382. The tax rate was 21 percent. The firm paid $3,681 in total interest expense and deducted $4,738 in depreciation expense. What was...

Q: Use the information in E5.14 for Carmichael Industries.

Use the information in E5.14 for Carmichael Industries. Instructions a. Calculate the current and ac id-test ratios for 2019 and 2020. b. Calculate Carmichael's current cash debt coverage ratio for 2...

Q: Use the information in E5.l 7 for Dropafix Inc.

Use the information in E5.l 7 for Dropafix Inc. Instructions a. Calculate the current and acid-test ratios for 2019 and 2020. b. Calculate Dropafix's current cash debt coverage ratio for 2020. c. Cal...

Q: Aero Inc. had the following statement of financial position at the

Aero Inc. had the following statement of financial position at the end of operations for 2019: During 2020, the following occurred: 1. Aero liquidated its FV-NI investments portfolio at a loss of $5,0...

Q: Refer to the Salza Technology Corporation in Problem 1. A

Refer to the Salza Technology Corporation in Problem 1. A. Using average balance sheet account data, calculate the (a) current ratio, (b) quick ratio, (c) total-debt-to-total-assets ratio, and (d) the...

Q: Sunny Day Stores operates convenience stores throughout much of the United States

Sunny Day Stores operates convenience stores throughout much of the United States. The industry is highly competitive, with low profit margins. The company’s competition includes nat...

Q: Information from the annual report of Hicks Company (a fictional company

Information from the annual report of Hicks Company (a fictional company) to shareholders follows: Required: 1. Suppose that the increase in the preferred stock account was due to the issuance of new...

Q: To meet the increasing demand for its microprocessors, Intelligent Micro Devices

To meet the increasing demand for its microprocessors, Intelligent Micro Devices began construction of a new manufacturing facility on January 1, 20X1. Construction costs were incurreduniformly throug...

Q: The following items are from the financial statements of Tall Oak Company

The following items are from the financial statements of Tall Oak Company Compute Tall Oak’s debt-to-equity ratio and interest coverage ratio for 2018 and 2019. Comment on Tall Oak&...

Q: This is your second interview with a prestigious brokerage firm for a

This is your second interview with a prestigious brokerage firm for a job as an equity analyst. You survived the morning interviews with the department manager and the Vice President of Equity. Everyt...

Q: Use the information in the table below to calculate the following ratios

Use the information in the table below to calculate the following ratios for Windswept Woodworks for year 1 and year 2.(Round your answers to 2 decimal places.) a. Interest coverage ratio (Assume that...

Q: Shown are data from recent reports of two toy makers. Dollar

Shown are data from recent reports of two toy makers. Dollar amounts are stated in thousands. a. Compute for each company (1) the debt ratio and (2) the interest coverage ratio. (Round the debt ratio...

Q: Exhibit 5.26 presents risk ratios for Walmart for 2019 and

Exhibit 5.26 presents risk ratios for Walmart for 2019 and 2018. Exhibits 1.19, 1.20, and 1.21 in Chapter 1 present the financial statements for Walmart. REQUIRED a. Compute the values of each of t...