accounting 233

2. A company’s fixed interest expense is $8,000, its income before interest expense and income tax 

is $32, 000. Its net income is $9,600. The company’s time interest earned ration equals? 

 

3. An employee earned $4,300 working for an employer. The current rate for FICA Social Security is 

6.2% and the rate for FICA Medicare 1.45%. The employer’s total FICA payroll tax for this 

employee is? 

 

4. A company had net cash flows from operations of $120,000, cash flows from financing of 

$330,000, total cash flows if $500,000 and average total assets of $2,500,000. The cash flow on 

total assets ration equals? 

 

 

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