1.
Concept Introduction
Times Interest Earned: The Times interest earned by a corporation reveals its capacity for debt repayment. A higher time interest earned score indicates that there are sufficient funds left with a business after paying its obligations that the business can invest in.
The times interest earned for three years.
2.
Concept Introduction
Times Interest Earned: The Times interest earned by a corporation reveals its capacity for debt repayment. A higher time interest earned score indicates that there are sufficient funds left with a business after paying its obligations that the business can invest in.
The company that appears to be considered as better for interest payment obligations.
3.
Concept Introduction
Times Interest Earned: The Times interest earned by a corporation reveals its capacity for debt repayment. A higher time interest earned score indicates that there are sufficient funds left with a business after paying its obligations that the business can invest in.
The company's position in respect of payment of interest obligations.
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FINANCIAL AND MANAGERIAL ACCOUNTING
- The following information was taken from the Netflix financial statements. For Netflix, sales is the product of the number of subscribers and the price charged for each subscription. What observations can you make about the previous three years of Netflixs sales? Given this data, provide any predictions you can make about the future financial performance of Netflix. What nonfinancial factors influenced that prediction?arrow_forwardBased on the quarter ended March 2023 financial results on investor.siriusxm.com, as per attached image and discuss whether Sirius XM's recent financial reports indicate that its business model is working. (i) Are its subscription fees increasing or declining? (ii) Are its revenue stream advertising and equipment sales growing or declining? (iii)Does its cost structure allow for acceptable profit marginsarrow_forwardA Financial Analysis Statement Calculate the 2021 (year ended 12/31/21) current ratio for Twitter. Calculate the 2021 (year ended 12/31/2021) current ratio for Meta. Which company has a better current ratio and why? Explain in a short paragraph. Calculate the 2021 accounts receivable turnover ratio for Twitter. Calculate the 2021 accounts receivable turnover ratio for Meta. Calculate the average collection period for each company. Show answer as number of days plus 2 decimals. Which company has a better receivable turnover ratio and why? Explain in a short paragraph. Calculate the 2021 return on assets for Twitter. Calculate the 2021 return on assets for Meta. Which company has a better return on assets and why? Explain in a short paragraph. Calculate the 2021 debt-to-equity ratio for Twitter. Calculate the 2021 debt-to-equity ratio for Facebook. Describe in a short paragraph what the debt-to-equity ratio measures and why this would be important to a potential creditor.…arrow_forward
- A firm has net income before interest and taxes of $ 193,000 and interest expense of $28, 100. What is the times interest - earned ratio? Note: Round your answer to 2 decimal places. -arrow_forwardNeed Help ASAP! Calculate the gross profit percentage ratio of Apple Inc. for the year 2020 (current year) and 2019 (previous year) and the gross profit percentage ratio of its industry peer Microsoft Corp. for the year 2020 (current year). Show calculations. Round the ratios to two decimal placesarrow_forwardeBook Print References INCOME STATEMENT (Figures in 5 millions) Net sales Cost of goods sold Other expenses Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax Taxes (at 21%) Net income Dividends Assets Cash and marketable securities Receivables Inventories Other current assets Total current assets. BALANCE SHEET (Figures in $ millions) Net property, plant, and equipment Other long-term assets $ 12,600 3,760 4,127 2,338 $ 2,375 655 Total assets Liabilities and shareholders' equity Payables Short-term debt $1,720 361 $ 1,359 $816 Other current liabilities Total current liabilities Long-term debt and leases Other long-term liabilities Shareholders' equity Total liabilities and shareholders' equity End of Year Start of Year $ 152 2,370 208 902 $ 3,632 19,855 3,710 $ 27,197 $83 2,082 157 837 $ 3,159 19,913 4,156 $ 27,228 $ 2,504 1,389 781 $ 4,674 8,512 6,118 7,924 $ 27,228 $ 2,980 1,543 757 $5,280 7,907 6,089 7,921 $ 27,197 Calculate the following…arrow_forward
- Calculate the Current Ratio, Debt Ratio, Return on Assets (ROA) and Return on Equity (ROE). For the ROA and ROE, you should use the average total assets and the average total equity in your calculations. (The average is the total across two years divided by two). Calculate these values for each of 2011-2014. Interpret your calculations: what does this information mean? How is the company doing?arrow_forwardAttached is Apple Inc.'s financial information. Please answer questions 1-4. 1. Apple's working capital turnover in 2021 is a. 17.27 b. 19.18 c. 14.82 d. 15.35 2. Apple's days to sell inventory in 2021 is a. 8.99 b. 10.82 c. 9.73 d. 7.61 3. Apple's return on assets ratio in 2021 is a. 0.46 b. 0.37 c. 0.18 d. 0.29 4. Apple's times interest rate earned ratio in 2021 is a. 24.38 b. 19.36 c. 37.47 d. 42.21arrow_forwardUsing Table 6–13, create a pro forma balance sheet using the percentage of sales method. If net income next year is $50,000, answer the following: How much did the owners take out of the business? What is the profit margin for next year?arrow_forward
- Selected financial data for Surf City and Paradise Falls are as follows:Required:1. Calculate the debt to equity ratio for Surf City and Paradise Falls for the most recent year. Which company has the higher ratio?2. Calculate the return on assets for Surf City and Paradise Falls. Which company appears more profitable?3. Calculate the times interest earned ratio for Surf City and Paradise Falls. Which company is better able to meet interest payments as they become due?arrow_forwardRefer again to the income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statement panels. Note that both companies have the same sales and net income. Answer questions (1) - (3) that follow, assuming that all data for the coming year is the same as the current year, except for the amount of sales. 1. If Cover-to-Cover Company wants to increase its profit by $20,000 in the coming year, what must their amount of sales be? 2. If Biblio Files Company wants to increase its profit by $20,000 in the coming year, what must their amount of sales be? 3. What would explain the difference between your answers for (1) and (2)? The answers are not different; each company has the same required sales amount for the coming year to achieve the desired target profit. The companies have goals that are not in the relevant range. Biblio Files Company has a higher contribution margin ratio, and so more of each sales dollar is…arrow_forwardA company’s current ratio is 2.0. Suppose the company uses cash to retire notes payable due within one year. What would be the effect on the current ratio and asset turnover ratio?arrow_forward
- Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College