A company has got $500 in cash and cash equivalents, $300 in inventory and $200 in account receivables. The firm has long term assets of $500. The firm has accounts payables of $200. All other current liabilities total $400. The firm had sales of $10000, EBIT of $5000, interest expenses of $2000 and net income of $800.
Compute the following ratios:
Current ratio, Debt Ratio, TIE, profit margin, total asset turnover.

The computation is shown below:

Explanation:

The computation is shown below:

Current ratio = current assets ÷ current liabilities

where,

Current assets = cash + inventory + account receivables

= $500 + $300 + $200

= $1000

Current liabilities is

= $200 + $400

= $600

So, the current ratio is

= $1,000 ÷ 600

= 1.67 times

Debt Ratio is

= Total Liabilities ÷ Total Assets

= $600 ÷ $1,500

= 40%  

TIE is Time Interest Earned ratio

= EBIT ÷  Interest Expense

= $5,000 ÷ $2,000

= 2.5

Profit margin is

= Net Income ÷ Total Sales

= $800 ÷$10,000

= 8%

And,

Total asset turnover  is

= Sales ÷ Total Assets

= $10,000 ÷ $1,500

= 6.67

answer; blank (1) hrm specialists,blank(2); line managers;

lbc corporation makes and sells a product called product wz. each unit of product wz requires 4.1 hours of direct labor at the rate of $20.00 per direct labor-hour. management would like you to prepare a direct labor budget for june. the company plans to sell 28,000 units of product wz in june. the finished goods inventories o