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The Financial Information Below Presents Selected Information from the Financial

question 70

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The financial information below presents selected information from the financial statements of Johnson Tools,Inc.for the year ended December 31,2008.
Calculate the:
A.Times interest earned ratio
B.Capital acquisitions ratio
C.Quality of income ratio
Comment on each of these ratios.
 Sales revenue $43,843 Amortization expense $883 Cost of goods sold 35,661 Selling, general & administrative  expenses 2,784 Interest expense 2,784 Income tax expense 485 Net income 1,246 Gross profit 8,182 Accounts receivable 12/31/07 2,895 Accounts receivable 12/31/08 2,636 Accounts payable 12/31/07 6,543 Accounts payable 12/31/08 7,519 Cash paid for income taxes 520 Interest paid to creditors 2,500 Cash flows from operating 3,797 Cash paid for property, plant, and 3,100 activities  equipment Cash flows from financing (2,702)Cash flows from investing (2,260) activitics  activitics \begin{array}{lrlr}\text { Sales revenue } & \$ 43,843 & \text { Amortization expense } & \$ 883 \\\text { Cost of goods sold } & 35,661 & \begin{array}{l}\text { Selling, general \& administrative } \\\text { expenses }\end{array} & 2,784\\\text { Interest expense } & 2,784 & \text { Income tax expense } & 485 \\\text { Net income } & 1,246 & \text { Gross profit } & 8,182 \\\text { Accounts receivable 12/31/07 } & 2,895 & \text { Accounts receivable 12/31/08 } & 2,636 \\\text { Accounts payable 12/31/07 } & 6,543 & \text { Accounts payable 12/31/08 } & 7,519\\\text { Cash paid for income taxes } & 520 & \text { Interest paid to creditors } & 2,500 \\\text { Cash flows from operating } & 3,797 & \text { Cash paid for property, plant, and } & 3,100 \\\text { activities } & & \text { equipment }\\\text {Cash flows from financing }&(2,702) & \text {Cash flows from investing }&(2,260)\\\text { activitics }&&\text { activitics }\end{array}


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