Question
The table below is the key financial results of a Hypothetical company MAQ APPLIANCES: (4 marks) 30 June 2020 30 June 2021 Net Interest-bearing Debt
The table below is the key financial results of a Hypothetical company MAQ APPLIANCES: (4 marks)
30 June 2020 | 30 June 2021 | |
Net Interest-bearing Debt | $2200m | $910m |
Equity | $5700m | $6500m |
Gearing Ratio | 26% | 12% |
Interest Cover | 11x | 34x |
Debt Cover | 1.8x | 0.4x |
Gearing ratio = Net debt / Net debt + equity (covenant limit <55%)
Debt cover = Net debt / EBITDA (covenant limit <3.5)
Interest cover = EBITA / Net interest expense (covenant limit >3.25)
Briefly analyse the financial position of MAQ Appliances from 30 June 2020 to 30 June 2021. (4 Marks)
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Financial Reporting Financial Statement Analysis And Valuation A Strategic Perspective
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
9th Edition
1337614689, 1337614688, 9781337668262, 978-1337614689
