Ratio Analysis Exercises and issues

Ratio Analysis Exercises and issues

Use the data for Tolito Treats, Inc., below, to do the assigned problems.

Compute the following earnings coverage ratios:
Earnings to fixed charges.
Cash flow to fixed charges.
Earnings coverage of preferred dividends.
Analyze and interpret the earnings coverage ratios in (A).

Tolito Treats, Inc. Consolidated Income Statement ($ thousands)
Year Ending December 31, 2015



Undistributed Income of Less Than 50%-Owned Affiliates


Total Revenue


Cost of Goods Sold


Selling and Administrative Expenses




Rental Expense


Share of Minority Interest in Consolidated Income


Interest Expense



Income Before Taxes


Income Taxes






Net Income


Less Dividends

Common Stock


Preferred Stock



Earnings Retained for the Year


Additional Information:

The following changes occurred in current assets and current liabilities for 2015:

Current Accounts

Increase (Decrease)

Current Accounts

Increase (Decrease)

Accounts Receivable


Notes Payable to Bank




Accounts Payable


Dividend Payable


The effective tax rate is 40%.
Shares of minority interests in consolidated income do not have fixed charges.
Interest expenses include:

Interest Incurred (Except Items Below)


Amortization of Bond Premium


Interest on Capitalized Leases


What Students Are Saying About Us

.......... Customer ID: 12*** | Rating: ⭐⭐⭐⭐⭐
"Honestly, I was afraid to send my paper to you, but splendidwritings.com proved they are a trustworthy service. My essay was done in less than a day, and I received a brilliant piece. I didn’t even believe it was my essay at first 🙂 Great job, thank you!"

.......... Customer ID: 14***| Rating: ⭐⭐⭐⭐⭐
"The company has some nice prices and good content. I ordered a term paper here and got a very good one. I'll keep ordering from this website."

"Order a Custom Paper on Similar Assignment! No Plagiarism! Enjoy 20% Discount"