Use the following information for question 1-3 (show the calculation) A firm has
ID: 2721807 • Letter: U
Question
Use the following information for question 1-3 (show the calculation)
A firm has the following accounts and financial data for year 2015;
Sales revenue $3,000,000
Inventory 1,000,000
Interest expense 200,000
Total operating expenses 400,000
Total assets 5,000,000
Cost of goods sold 1,800,000
Preferred stock dividends 200,000
Tax rate 25%
Number of outstanding common stock shares 100,000
1. the firm EBIT is ------------ and interest coverage ratio for 2015 is --------------
a. $800,000 , 4 times
b. $1,000,000 , 5 times
c. $1,200,000 , 6 times
d. none of the above, the answer is ----------
2. the firm ROA for year 2015 is ---------------
a. 5%
b. 9%
c. 12%
d. none of the above, the answer is -----------
3. the firm’s earning per share for year 2015 is -----------
a. $2.5
b. $4.5
c. $6.0
d. none of the above, the answer is ----------
Explanation / Answer
1. b. $1,000,000 (3000000- 1800000-200000) , 5 times
2. c. 12%
3. c. $6.0
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