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What is the operating profit margin

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Question - Rosuelo Corporation has P800,000.00 of debt outstanding, and it pays an interest rate of 10% annually on its bank loan. Rosuelo's annual sales are P3,200,000.00, its average tax rate is 40%. If the company does not maintain TIE ratio of at least 4 times, its bank refuse to renew its loan, and bankruptcy will result. Net Profit Margin of the company is 6%.

Required -

1. What is the current TIE ratio?

2. What is the Operating Profit Margin?

Reference no: EM132806972

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