How Am I Able To Find The Net Income
13. Fixed charge coverage
ABC Corporation
Income Statement
For The Year Ending December 31, 201X
Sales (on credit) $2,640,000
Less: Cost of goods sold 1,760,000
Gross profit $ 880,000
Less: Selling and administrative expenses 616,000*
Operating profit (EBIT) $ 264,000
Less: Interest expense 33,000
Earnings before taxes (EBT) $ 231,000
Less: Taxes 82,500
Earnings after taxes (EAT) $ 148,500
*Includes $44,000 in lease payments.
ABC Corporation
Balance Sheet
December 31, 201X
Assets
Current assets:
Cash $ 77,000
Marketable securities 44,000
Accounts receivable (net) 275,000
Inventory 220,000
Total current assets $ 616,000
Investments 110,000
Net plant and equipment 484,000
Total assets $1,210,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 143,000
Notes payable 132,000
Accrued taxes 33,000
Total current liabilities $ 308,000
Long-term liabilities:
Bonds payable 220,000
Total liabilities $ 528,000
Stockholders’ equity
Preferred stock, $110 par value $ 165,000
Common stock, $5.50 par value 55,000
Capital paid in excess of par 220,000
Retained earnings 242,000
Total stockholders’ equity $ 682,000
Total liabilities and stockholders’ equity $1,210,000
