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STU Inc. wants to assess its ability to meet financial obligations using coverage ratios. The financial data for the year is as follows: Earnings Before
STU Inc. wants to assess its ability to meet financial obligations using coverage ratios. The financial data for the year is as follows:
- Earnings Before Interest and Taxes (EBIT): $200,000
- Interest Expense: $50,000
- Net Income: $150,000
Calculate the following coverage ratios:
- Times Interest Earned Ratio
- Cash Coverage Ratio
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Accounting Information Systems
Authors: Marshall B. Romney, Paul J. Steinbart
12th edition
132552620, 978-0132552622
