MARNI COMPANY Balance Sheet As of December 31, 2007 ASSETS S50,000 Cash 100,000 Accounts Receivable 200,000 Inventory Net Plant and Equipment Total Assets 650.000 $1.000,000 LIABILITIES AND STOCKHOLDERS' EQUITY $100,000 90.000 Accounts Payable Accrued Expenses 250.000 Long-Term debt Common Stock 100,000 50,000 410.000 $1,000,000 Paid-In capital Retained earnings Total Liabilities and Stockholders' Equity MARNI COMPANY Income Statement For the Year Ended December 31, 2007 Sales (all on credit) Cost of Goods Sold $2,000,000 1.750.000 250.000 Gross Profit Sales and Administrative Expense Fixed Lease Expenses Depreciation Operating Profit Interest Expense 30,000 10.000 60.000 150.000 25.000 125,000 50.000 Profit before Taxes Taxes (40%%) $75,000 Net Income Refer to the figure above. Fixed charge coverage for Marni Company is 15x 7.5x 0.9x 4.6x