[maandpa1227]

Does this one make sense to anyone?

The Sally Corporation's income statement is given below.
Sally Corporation
Sales…………………………………$250,000
Cost of Goods Sold………………….. 145,000
Gross Profit……………………………105,000
Fixed Charges (other than interest)…… 25,000
Income before interest and taxes……….. 80,000
Interest………………………………….. 20,000
Income before taxes……………………. 60,000
Taxes (35%)…………………………….. 21,000
Income after taxes……………………….$39,000

a. What is Sally's Time-Interest-Earned Ratio?
net income + interest / interest =
60,000 + 20,000 = 80,000 / 20,000 = 4

b. What is the Fixed-Charge-Coverage Ratio? Go to investopedia.com. Formula is given.
80,000 (income before interest and tax) + fixed charge 25,000 = 105,000 / fixed charge before tax 25,000 / interest 20,000= 1.25

c. What is the Net Profit Margin?
Net profit is divided by net revenues... not sure about this one...

d. What is the Gross Profit Margin?

Gross profit = 105,000 less Cost of goods sold = 145,000 = 40,000

Please help!

[CaptainForest]

A)
Times Interest Earned Ratio = (net income + interest) / interest.
Times Interest Earned Ratio = (39,000 + 20,000) / 20,000
Times Interest Earned Ratio = 2.95

B)
Fixed-Charge Coverage Ratio = [EBIT + Fixed Charge (before tax)] / [Fixed Charge (before tax) + Interest]

Fixed-Charge Coverage Ratio = [80,000 + 25,000] / [25,000 + 20,000]
Fixed-Charge Coverage Ratio = 105,000 / 45,000
Fixed-Charge Coverage Ratio = 2.33

C)
Net Profit Margin = Net income after taxes / Revenue
Net Profit Margin = 39,000 / 250,000
Net Profit Margin = 0.156

D)
Gross Profit Margin = [Revenue - COGS] / Revenue
Gross Profit Margin = [250,000 – 145,000] / 250,000
Gross Profit Margin = 105,000 / 250,000
Gross Profit Margin = 0.42

[maandpa1227]

Thank you. This is a stressful journey and it would probably have made more sense if I had an algrebra class first.

A)
Times Interest Earned Ratio = (net income + interest) / interest.
Times Interest Earned Ratio = (39,000 + 20,000) / 20,000
Times Interest Earned Ratio = 2.95

B)
Fixed-Charge Coverage Ratio = [EBIT + Fixed Charge (before tax)] / [Fixed Charge (before tax) + Interest]

Fixed-Charge Coverage Ratio = [80,000 + 25,000] / [25,000 + 20,000]
Fixed-Charge Coverage Ratio = 105,000 / 45,000
Fixed-Charge Coverage Ratio = 2.33

C)
Net Profit Margin = Net income after taxes / Revenue
Net Profit Margin = 39,000 / 250,000
Net Profit Margin = 0.156

D)
Gross Profit Margin = [Revenue - COGS] / Revenue
Gross Profit Margin = [250,000 – 145,000] / 250,000
Gross Profit Margin = 105,000 / 250,000
Gross Profit Margin = 0.42

[CaptainForest]

You're welcome