Selected Data from O'Brien Ltd

question 123

Essay

Selected data from O'Brien Ltd. are presented below: Instructions
Calculate the profitability ratios that can be derived from the above information.

---

Definitions:

Tax Rate

The percentage of income or value of a transaction that is required to be paid as tax to a governmental authority.

Interest Paid

The amount paid by a borrower to a lender in compensation for the use of borrowed money, typically expressed as an annual percentage of the principal.

Times Interest Earned

A financial ratio that measures a company's ability to meet its debt obligations based on its current income. It's calculated by dividing earnings before interest and taxes (EBIT) by the interest expenses.

Depreciation Expense

The orderly assignment of the financial value of a real asset over its life of usefulness.