The Fortune Company reported the following income for Year 2:Sales$130,000 Cost of goods sold 80,000 Gross margin$50,000 Selling and administrative expense 15,000 Operating income$35,000 Interest expense 5,000 Income before taxes$30,000 Income tax expense 10,000 Net income$20,000 What is the company's number of times interest is earned ratio?
A. 4 times
B. 7 times
C. 6 times
D. None of these answers is correct.
Answer: B
You might also like to view...
Which of the following should not be considered cash by an accountant?
A) money orders B) bank checking accounts C) postage stamps D) travelers' checks
If a business had sales of $4,000,000 and a margin of safety of 20%, what was the break-even point?
A) $5,000,000 B) $3,200,000 C) $12,000,000 D) $1,000,000
List five issues Sears may raise to review its strategy for large appliances.
What will be an ideal response?
Shareholders can ensure that firms pursue goals that are in their best interest by _____.?
A. ?binding the management with stockholder-sponsored proposals B. ?ensuring that management is working towards maximizing current earnings C. ?compensating managers on the basis of the firm's best performance in the last five years D. ?actively implementing remedies to realign management decisions with the interests of investors E. ?providing incentives to managers to motivate them to take actions that maximize stock prices