Refer to the file Yellow Hammer Corporation. Assess Yellow Hammers ability to meet its interest obligations in 2017 by calculating leverage ratio of total debt to EBITDA.

8.52x

9.52x

10.06x

6.29x

Yellow Hammer Corporation Income Statement Year Ended December 31 (in $ millions) 2016 176.1 147.3 28.8 13.0 7.6 1.1 7.1 0.0 7.1 4.6 2.5 0.6 2017 186.7 153.4 33.3 13.5 8.2 Total sales Cost of sales Gross Profit Selling, general, and administrative expenses Research and development Depreciation and amortization Operating Income Other income Earnings Before Interest and Taxes Interest income (expense) Pretax Income Taxes Net Income 10.4 0.0 10.4 7.7 2.7 0.7 2.0 $0.556 $0.526 Earnings per share $0.528 Diluted earnings per share $0.500