Corporate Financial Accounting
14th Edition
ISBN: 9781305653535
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 11, Problem 11.2ADM
Arch Coal:Times interest earned
Arch Coal, Inc. is a major coal mining company in the United States. Condensed income statement information for three recent years follows (in millions):
| Year 3 | Year 2 | Year 1 | |
| Revenues | $2,937 | $ 3,014 | $ 3,768 |
| Costs and expenses | 3,087 | 3,677 | 4,52$ |
| Loss from operations | $ (150) | $ (663) | $ (757) |
| Interest expense (net) | 383 | 375 | 312 |
| Loss before income taxes | $ (533) | $(1,038) | $(1,069) |
A. Compute the times interest earned ratio for the three years. (Round to one decimal place.)
B. How would you interpret a negative ratio?
C. Is the trend improving or deteriorating?
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Students have asked these similar questions
1. Refer to the following financial information of Scholz Company:
NOPAT
8,250,000.00
EBITDA
17,725,000.00
Net Income
5,050,000.00
Capital Expenditures
6,820,000.00
After tax capital costs
6,280,000.00
Tax rate
40%
Calculate the Company’s depreciation and amortization expense
2. Refer to Scholz Company, calculate its interest expense. Use 2 decimal places for your final answer.
3. Refer to Scholz Company, calculate its EVA. Use 2 decimal places for your final answer.
Step Up Ladders Company provides the following financial information:
Income from operations
$400,000
Interest expense
46,000
Gains/(losses) on sale of equipment
2,700
Net income
351,300
Total assets at Jan. 1
2,800,000
Total assets at Dec .31
3,200,000
Calculate return on investment based on the information given above. (Round your answer to two decimal places.)
A.
11.71%
B.
13.33%
C.
12.5%
D.
14.29%
Assume Metro Corporation had a net income of $2,200 for the year ending December 31. Its beginning and ending total assets were $35,500 and $19,000, respectively. Calculate Metro's return on assets (ROA). (Round your percentage answer to two decimal places.)
A.
11.58%
B.
4.04%
C.
8.07%
D.
6.20%
Chapter 11 Solutions
Corporate Financial Accounting
Ch. 11 - Describe the two distinct obligations incurred by...Ch. 11 - Explain the meaning of each of the following terms...Ch. 11 - If you asked your broker to purchase for you a 12%...Ch. 11 - A corporation issues 26,000,000 of 9% bonds to...Ch. 11 - If bonds issued by a corporation are sold at a...Ch. 11 - Prob. 6DQCh. 11 - Bonds Payable has a balance of 5,000,000 and...Ch. 11 - Prob. 8DQCh. 11 - Prob. 9DQCh. 11 - Issuing bonds at face amount On January 1, the...
Ch. 11 - Issuing bonds at a discount On the first day of...Ch. 11 - Prob. 11.3BECh. 11 - Prob. 11.4BECh. 11 - Prob. 11.5BECh. 11 - Redemption of bonds payable A 500,000 bond issue...Ch. 11 - Prob. 11.1EXCh. 11 - Entries for issuing bonds Thomson Co. produces and...Ch. 11 - Prob. 11.3EXCh. 11 - Prob. 11.4EXCh. 11 - Entries for issuing and calling bonds; loss Hoover...Ch. 11 - Entries for issuing and calling bonds; gain Mia...Ch. 11 - Prob. 11.7EXCh. 11 - Present value of amounts due Assume that you are...Ch. 11 - Prob. 11.9EXCh. 11 - Present value of an annuity On January 1 you win...Ch. 11 - Prob. 11.11EXCh. 11 - Prob. 11.12EXCh. 11 - Present value of bonds payable; premium Moss Co....Ch. 11 - Amortize discount by interest method On the first...Ch. 11 - Amortize premium by interest method Shunda...Ch. 11 - Prob. 11.16EXCh. 11 - Prob. 11.17EXCh. 11 - Bond discount, entries for bonds payable...Ch. 11 - Prob. 11.2APRCh. 11 - Entries for bonds payable, including bond...Ch. 11 - Prob. 11.4APRCh. 11 - Prob. 11.5APRCh. 11 - Bond discount, entries for bonds payable...Ch. 11 - Prob. 11.2BPRCh. 11 - Prob. 11.3BPRCh. 11 - Bond discount, entries for bonds payable...Ch. 11 - Prob. 11.5BPRCh. 11 - Continuing Company AnalysisAmazon: Times interest...Ch. 11 - Arch Coal:Times interest earned Arch Coal, Inc. is...Ch. 11 - Aeropostale: Times interest earned Aeropostale,...Ch. 11 - Prob. 11.4ADMCh. 11 - Ethics in Action CLG Capital Inc. is a large...Ch. 11 - Prob. 11.3TIF
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