Reference no: EM13327263

Problem 1

A firm has net income before interest and taxes of $135,000 and interest expense of $27,500.

(a) What is the times-interest-earned ratio?

Times-interest earned

(b) If the firm's lease payments are $43,700, what is the fixed charge coverage?

Fixed charge coverage

Problem 2

Quantum Moving Company has the following data. Industry information also is shown.

Company data							Industry data on
Year	Net income			Total assets			Net income/Total assets
2008	$	447,000		$	2,899,000			13.5	%
2009		429,000		$	3,262,000			9.2
2010		442,000		$	3,826,000			7.0

Year	Debt			Total assets			Industry data on debt/Total assets
2008	$	1,639,000		$	2,899,000			54.2	%
2009		1,748,000		$	3,262,000			44.8
2010		1,943,000		$	3,826,000			33.0

(a) Calculate the company's data in terms of (Round your answers to 1 decimal place. Omit the "%" sign in your response):

	2008	2009	2010
Net income / Total assets
Debt / Total assets

(b) As an industry analyst comparing the firm to the industry, are you likely to praise or criticize the firm in terms of:

	Praise/Criticize
Net income / Total assets
Debt / Total assets