15-9. (Analyzing coverage ratios) (Related to Checkpoint 15.1 on page 502) The incomestatements for Home Depot, Inc. (HD), spanning the period 2014–2016 (just beforethe housing crash, so these are representative years) are as follows:$ thousands201620152014Net operating income (EBIT)Interest expenseEarnings before taxesIncome taxes$11,774,000(919,000)$11,021,000(4,012,000)$7,009,000$10,469,000(830,000)$ 9,976,000(3,631,000)$ 6,345,000$9,166,000(711,000)$8,467,000(3,082,000)$5,385,000Net incomea. Calculate the times interest earned ratio for each of the years for which you havedata.b. What is your assessment of how the firm's ability to service its debt obligationshas changed over this period?

$ thousands 2016 2015 2014 Net operating income (EBIT) $ 1,17,74,000.00 $ 1,04,69,000.00 $…

Answered: (Analyzing coverage ratios) (Related to…

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter4: Profitability Analysis

Section: Chapter Questions

Problem 23PC

See similar textbooks

Similar questions

Randall Corporation reported the following revenue data:Year Net revenues (in millions)$$$$6,8007,0046,7327,2762016201720182019Use 2016 as the base year. The trend percentage in 2019 is closest toa. 93%.b. 104%.c. 107%.d. 112%
Heddi Corporation, a VAT registered dealer of appliances, has the following data for the first quarter of 2023:Sales, total invoice value, P6,921,600Purchases, net of input taxes, P5,500,000Sales returns (based on total invoice value), P224,000Purchases returns, gross of taxes, P336,000Deferred input taxes (carried over from the third quarter of the current year), P9,500How much is the value-added tax still due for the last quarter of the current year using the 12% VAT rate?
Use the following information for Problems 30 and 31. On March 15, Calloway, Inc., paid property taxes of $480,000 for the calendar year. 30. How much of this expense should Calloway’s income statement reflect for the quarter ending March 31? a. –0– b. $40,000 c. $120,000 d. $480,000 31. The journal entry at March 15 to record the payment of property taxes would include which of the following? a. A debit to Property Tax Expense of $480,000 b. A credit to Cash of $120,000 c. A debit to Prepaid Property Taxes of $360,000 d. A credit to Prepaid Property Taxes of $40,000
ccounting Tyre Recycling Inc. reported the following pre-tax accounting incomes (losses): Accounting (loss)/income Tax rates* 2021 $10,000 25% 2022 55,000 20% 2023 (112,000) 20% 2024 21,000 19% -for 2024 and beyond All enacted in 2021 The only timing difference was in 2023 when warranty expense was $40,000 and warranties paid out in cash was $30,000. For any losses, any carrybacks possible are done first, and then it is probable that 80% of them not carried back will be applicable against any future taxable income. Required: a) Prepare journal entries to record the tax implications for 2023. Show supporting information.
Use the following information for Problems 30 and 31.On March 15, Calloway, Inc., paid property taxes of $480,000 for the calendar year.How much of this expense should Calloway’s income statement reflect for the quarter ending March 31?a. –0–b. $40,000c. $120,000d. $480,000
C Company has the following data for the year ending 12/31/2020 (dollars are in thousands): Net income = $600; EBIT = $1,184; Total assets = $3,000; Short-term investments = $200; Total capital employed = $2,193; and tax rate = 30%. The company’s WACC is 11.07%. What was its Economic Value Added (EVA) for the year 2020? Round your answer to the nearest dollar. Group of answer choices: $583 $586 $577 $572 $580
The pretax financial income (or loss) figures for Martinez Company are as follows. 2012 $148,000 2013 275,000 2014 83,000 2015 (148,000 ) 2016 (362,000 ) 2017 115,000 2018 104,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 45% tax rate for 2012 and 2013 and a 40% tax rate for the remaining years.Prepare the journal entries for the years 2014 to 2018 to record income tax expense and the effects of the net operating loss carrybacks and carryforwards assuming Martinez Company uses the carryback provision. All income and losses relate to normal operations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
J-Matt, Inc., had pretax accounting income of $291,000 and taxable income of $300,000 in 2016. The only difference between accounting and taxable income is estimated product warranty costs for sales this year. Warranty payments are expected to be in equal amounts over the next three years. Recent tax legislation will change the tax rate from the current 40% to 30% in 2018. Determine the amounts necessary to record J-Matt’s income taxes for 2016 and prepare the appropriate journal entry.
The pretax financial income (or loss) figures for Marin Company are as follows. 2015 $161,000 2016 248,000 2017 76,000 2018 (161,000 ) 2019 (390,000 ) 2020 119,000 2021 95,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 25% tax rate for 2015 and 2016 and a 20% tax rate for the remaining years.Prepare the journal entries for the years 2017 to 2021 to record income tax expense and the effects of the net operating loss carryforwards. All income and losses relate to normal operations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.)
In 2016, Ryan Management collected rent revenue for 2017 tenant occupancy. For financial reporting, the rent is recorded as deferred revenue and then recognized as income in the period tenants occupy rental property, but for income tax reporting it is taxed when collected. The deferred portion of the rent collected in 2016 was $50 million. Taxable income is $180 million. No temporary differences existed at the beginning of the year, and the tax rate is 40%. Prepare the appropriate journal entry to record income taxes.
Byron Books Inc. recently reported $13 million of net income. Its EBIT was $22.1 million, and its tax rate was 35%. What was its interest expense? (Hint: Write out the headings for an income statement, and then fill in the known values. Then divide $13 million of net income by (1 - T) = 0.65 to find the pretax income. The difference between EBIT and taxable income must be interest expense. Use this same procedure to complete similar problems.) Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest dollar, if necessary. Do not round intermediate calculations.
In April, 2022, Norman Industries sold available-for-sale debt securities that cost $560,000 and received a check from its broker for $795,000. When the check was deposited, the accounting clerk debited cash and credited Available-for-Sale Debt Investments for the full amount. The CFO questioned the entry in December, 2022. If this is an error, what is the proper correcting entry? (Tax rate is 40%.) Group of answer choices Available-for-Sale Debt Investments 795,000 Realized Gain 235,000Retained Earnings-Prior Period Adj. 560,000 Available-for-Sale Debt Investments 235,000 Income Tax Expense 94,000Retained Earnings 141,000 Available-for-Sale Debt Investments 235,000 Realized Gain 235,000 Realized Gain 235,000 Available-for-Sale Debt Investments 235,000

SEE MORE QUESTIONS

Recommended textbooks for you

Financial Reporting, Financial Statement Analysis…

Finance

ISBN:

9781285190907

Author:

James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:

Cengage Learning