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SmartTech Inc. has the following financial data for the year ended 31 December 2021: Sales Revenue: 600,000 Operating Expenses: 200,000 Interest Expense: 30,000 Tax Expense:

SmartTech Inc. has the following financial data for the year ended 31 December 2021:

  • Sales Revenue: £600,000
  • Operating Expenses: £200,000
  • Interest Expense: £30,000
  • Tax Expense: £40,000
  • Net Income: £70,000

Requirements:

  1. Calculate the interest coverage ratio.
  2. Prepare an income statement for SmartTech Inc. for the year ended 31 December 2021.
  3. Discuss the impact of interest rates on the company’s profitability.

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