Solution-Shown here are condensed income statements

Shown here are condensed income statements

Assignment Help Accounting Basics

Reference no: EM13901625

Shown here are condensed income statements for two different companies ( both are organized as LLCs and pay no income taxes).

Required:

1. Compute times interest earned for Ellis Company.

2. Compute times interest earned for Seidel Company.

3. What happens to each company's net income if sales increase by 10%?

4. What happens to each company's net income if sales increase by 40%?

5. What happens to each company's net income if sales increase by 90%?

6. What happens to each company's net income if sales decrease by 20%?

7. What happens to each company's net income if sales decrease by 50%?

8. What happens to each company's net income if sales decrease by 80%? Analysis Component:

9. Comment on the results from parts 3 through 8 in relation to the fixed cost strategies of the two companies and the ratio values you computed in parts 1 and 2.

Reference no: EM13901625

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Shown here are condensed income statements

Reference no: EM13901625

Reference no: EM13901625

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