Question
Driver Enterprises reports 2015 earnings before interest and taxes (EBIT) of $380,296 and interest expense of $33,250. Included in its reported operating expenses for 2015
Driver Enterprises reports 2015 earnings before interest and taxes (EBIT) of $380,296 and interest expense of $33,250. Included in its reported operating expenses for 2015 were operating lease expenses of $126,000. It has also reported capitalized interest of $26,993. Based on footnote data and a discount rate of 12% you have already calculated the present value of the future operating lease obligations to be $355,646. Calculate the fixed charge coverage ratio after incorporating the impact of the operating leases using the 1/3-2/3 method. Present your answer rounded to two decimal places, e.g., 20.00.
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