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Anuta_ua [19.1K]
3 years ago
14

Assume a company's Income Statement for Year 12 is as follows Year 12 in 000s Income Statement Data Net Revenues from Footwear S

ales Cost of Pairs Sold Warehouse Expenses Marketing Expenses Administrative Expenses Operating Profit (Loss) Interest Income (Expense) Pre-tax Profit (Loss) Income Taxes Net Profit (Loss) $580,000 350,000 45,000 90,000 15,000 80,000 (20,000) 60,000 18,000 $42.000 Based on the above income statement data and the formula for calculating the interest coverage ratio presented in the Help section for p. 5 of the Footwear Industry Report, the company's interest coverage ratio is
A. 29.0
B. 2.20
C. 4.00
D. 3.00
E. 2.10
Business
1 answer:
eimsori [14]3 years ago
6 0

Answer:

C. 4.00

Explanation:

The interest coverage ratio is the same as times interest earned.

It is a the financial ratio that shows how many times over the income or earnings before interest and tax can be used to pay the interest payable in the same period.

Hence, Interest coverage

= Earnings before interest and taxes (EBIT) / Interest expense

EBIT = $580,000 - $350,000 - $45,000 - $90,000 -$15,000

= $80,000

The company's interest coverage ratio is

= $80,000/$20,000

= 4.00

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3 years ago
Larry is a minor, age 16 years old.
maxonik [38]

Answer:

What is entirely true about this contract is:

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2 years ago
At Bargain Electronics, it costs $29 per unit ($17 variable and $12 fixed) to make an MP3 player that normally sells for $53. A
algol13

Answer and Explanation:

The computation is shown below;

Particulars       Reject Order      Accept Order       Net Income

Revenues               $0                      $126,280        $126,280

                                                    (4,510 units × $28)

Variable manufacturing $0              $76,670          -$76,670

                                                  (4,510 units × $17)

Shipping                   $0                    $18,040            -$18,040

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Answer:

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Explanation:

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