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DGX operates a haulage business in C-land, where the local currency is the C$. Two years ago, DGX originated a 10-year, C$20 million loan facility
DGX operates a haulage business in C-land, where the local currency is the C$. Two years ago, DGX originated a 10-year, C$20 million loan facility to fund the development of an additional warehouse to support its expansion in the south of C-land. You have recently joined DGX as Finance Manager and are reviewing documentation relating to the company's loan facilities. Your review is focused on the covenant status of DGX's term loans and note that interest cover is a stipulated condition of the C$20 million loan facility, and you have been asked to determine the company's interest cover ratio. You have the following extracts from the company's most recent financial statements: C$'000 Gross profit 27,555 Profit before interest and tax 6,567 Profit before tax 4,517 Overdraft 875 Long-term borrowings 28,500 Calculate DGX's interest cover ratio. Give your answer to 1 decimal place. Do not include symbols, commas or letters in your response
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