Question
Problem 3-23 Debt utilization ratios [LO3-2] The Lancaster Corporations income statement is given below. LANCASTER CORPORATION Sales $ 259,000 Cost of goods sold 116,000 Gross
Problem 3-23 Debt utilization ratios [LO3-2]
The Lancaster Corporations income statement is given below.
| LANCASTER CORPORATION | ||
| Sales | $ | 259,000 |
| Cost of goods sold | 116,000 | |
| Gross profit | $ | 143,000 |
| Fixed charges (other than interest) | 27,100 | |
| Income before interest and taxes | $ | 115,900 |
| Interest | 20,000 | |
| Income before taxes | $ | 95,900 |
| Taxes (35%) | 33,565 | |
| Income after taxes | $ | 62,335 |
a. What is the times-interest-earned ratio? (Round your answer to 2 decimal places.)
b.What would be the fixed-charge-coverage ratio? (Round your answer to 2 decimal places.)
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Introduction To Derivatives And Risk Management
Authors: Robert Brooks, Don M Chance
9th Edition
1133190197, 978-1133190196
