Math Problem Statement
Tech Supplies Company, Incorporated, is a leading retailer specializing in consumer electronics. A condensed income statement and balance sheet for the fiscal year ended February 1, 2020, are shown below.
Tech Supplies Company, Incorporated Balance Sheet At February 1, 2020 ($ in millions) Assets Current assets: Cash and cash equivalents $ 1,986 Accounts receivable (net) 1,167 Inventory 5,052 Other current assets 394 Total current assets 8,599 Long-term assets 3,638 Total assets $ 12,237 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 4,500 Other current liabilities 2,575 Total current liabilities 7,075 Long-term liabilities 2,218 Shareholders’ equity 2,944 Total liabilities and shareholders’ equity $ 12,237 Tech Supplies Company, Incorporated Income Statement For the Year Ended February 1, 2020 ($ in millions) Revenues $ 39,533 Costs and expenses 38,154 Operating income 1,379 Other income (expense)* (66) Income before income taxes 1,313 Income tax expense 518 Net income $ 795 *Footnote asteriskIncludes $89 of interest expense.
Required: 1-a. Calculate the current ratio for Tech Supplies for its fiscal year ended February 1, 2020.
1-b. Calculate the acid-test ratio for Tech Supplies for its fiscal year ended February 1, 2020.
1-c. Calculate the debt to equity ratio for Tech Supplies for its fiscal year ended February 1, 2020.
1-d. Calculate the times interest earned ratio for Tech Supplies for its fiscal year ended February 1, 2020.
Note: For all requirements, round your answers to 2 decimal places.
what is the times interest earned ratio?
Solution
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Math Problem Analysis
Mathematical Concepts
Financial Ratios
Corporate Finance
Algebra
Formulas
Current Ratio = Current Assets / Current Liabilities
Acid-Test Ratio = (Cash + Accounts Receivable + Short-Term Investments) / Current Liabilities
Debt to Equity Ratio = Total Liabilities / Shareholders' Equity
Times Interest Earned (TIE) = EBIT / Interest Expense
Theorems
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Suitable Grade Level
University-level Finance or Accounting
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