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Assume a company's Income Statement for Year 9 is as follows:
\begin{tabular}{|lr|}
\hline
\textbf{Income Statement Data} & \textbf{Year 9 (in 000s)} \\
\hline
Total Revenues & \[tex]$630,000 \\
Cost of Goods Sold & \$[/tex]390,000 \\
Delivery Costs & \[tex]$35,000 \\
Marketing Costs & \$[/tex]40,000 \\
Administrative Expenses & \[tex]$10,000 \\
Operating Profit (Loss) & \$[/tex]155,000 \\
Other Income (Expense) & \[tex]$(1,000) \\
Interest Income (Expense) & \$[/tex](9,000) \\
Pre-tax Profit (Loss) & \[tex]$145,000 \\
Income Taxes & \$[/tex]43,500 \\
Net Profit (Loss) & \[tex]$101,500 \\
\hline
\end{tabular}

Based on the above income statement data, the company's interest coverage ratio and operating profit margin are:

A. 19.29 and $[/tex]23.3\%[tex]$
B. 16.71 and $[/tex]24.6\%[tex]$
C. 17.22 and $[/tex]24.6\%[tex]$
D. 14.91 and $[/tex]23.0\%[tex]$
E. 16.11 and $[/tex]16.2\%$

Sagot :

GinnyAnswer
To solve the problem, we need to calculate the Interest Coverage Ratio and the Operating Profit Margin using the given data from the income statement.

### Interest Coverage Ratio
The Interest Coverage Ratio is calculated by dividing the Operating Profit by the absolute value of the Interest Income (Expense).

First, identify the values from the income statement:
- Operating Profit = \[tex]$155,000 - Interest Income (Expense) = \$[/tex] -9,000

The formula for the Interest Coverage Ratio is:
[tex]\[ \text{Interest Coverage Ratio} = \frac{\text{Operating Profit}}{|\text{Interest Income (Expense)}|} \][/tex]

Plug in the numbers:
[tex]\[ \text{Interest Coverage Ratio} = \frac{155,000}{| -9,000 |} = \frac{155,000}{9,000} \approx 17.22 \][/tex]

### Operating Profit Margin
The Operating Profit Margin is calculated by dividing the Operating Profit by the Total Revenues and then multiplying by 100 to get a percentage.

Identify the values from the income statement:
- Operating Profit = \[tex]$155,000 - Total Revenues = \$[/tex]630,000

The formula for the Operating Profit Margin is:
[tex]\[ \text{Operating Profit Margin} = \left( \frac{\text{Operating Profit}}{\text{Total Revenues}} \right) \times 100 \][/tex]

Plug in the numbers:
[tex]\[ \text{Operating Profit Margin} = \left( \frac{155,000}{630,000} \right) \times 100 \approx 24.60\% \][/tex]

### Conclusion
Based on our calculations:
- The Interest Coverage Ratio is approximately [tex]\(17.22\)[/tex].
- The Operating Profit Margin is approximately [tex]\(24.60\%\)[/tex].

The correct answer from the given options is:
17.22 and [tex]\(24.6\%\)[/tex].

So, the answer is:
- 17.22 and [tex]\(24.6\%\)[/tex].
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