Question
The Morris Corporation has $600,000 of debt outstanding, and it pays an interest rate of 8% annually. Morriss annual sales are $3 million, its average
The Morris Corporation has $600,000 of debt outstanding, and it pays an interest rate of
8% annually. Morriss annual sales are $3 million, its average tax rate is 40%, and its net
profit margin on sales is 3%. If the company does not maintain a TIE ratio of at least 5 to 1,
then its bank will refuse to renew the loan and bankruptcy will result. What is Morriss
TIE ratio?
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Quantitative Trading
Authors: Ernest P. Chan
2nd Edition
1119800064, 978-1119800064
