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In 2020, Natural Selection, a nationwide computer dating service, had $502 million of assets and $201 million of liabilities. Earnings before interest and taxes
In 2020, Natural Selection, a nationwide computer dating service, had $502 million of assets and $201 million of liabilities. Earnings before interest and taxes were $121 million, interest expense was $29 million, the tax rate was 40 percent, principal repayment requirements were $25 million, and annual dividends were 25 cents per share on 20 million shares outstanding. a. Calculate the following for Natural Selection: Note: Round your answers to 2 decimal places. Liabilities-to-equity ratio Times-interest-earned ratio Times burden covered 0.67 4.17 1.71 b. What percentage decline in earnings before interest and taxes could Natural Selection have sustained before failing to cover Note: Round your answers to 1 decimal place. Interest payment requirements? Principal and interest requirements? Principal, interest, and common dividend payments? % 70.7 % %
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