Question
Use only the information outlined below ($ in millions; YE 12/31/20): Cash 25 Accounts Payable 70 Accounts Receivable 120 Accruals 50 Inventories 100 CMLTD 25
Use only the information outlined below ($ in millions; YE 12/31/20):
Cash 25 Accounts Payable 70
Accounts Receivable 120 Accruals 50
Inventories 100 CMLTD 25
Prepaids 10
PP&E 113 Long Term Debt 150
Goodwill 37
Equity 110
Revenues: $500
EBIT: $145
Depreciation/Amortization $16
Interest Expense: $5
Tax Rate: 25%
01/01/20 PPE: $100
2019 CMLTD: $30
Is the Company in compliance with the following covenants (show all your calculations)? Total of 19 points
- Maximum Debt/Tangible Net Worth of 1.2:1.0 on 12/31/20 4 pts
- Maximum Debt/EBITDA of 3.5:1.0 on 12/31/20 3 pts
- Minimum Quick Ratio of 2.0:1.0 on 12/31/20 4 pts
- Minimum Debt Service Coverage Ratio for 2020 of 1.5:1.0. For this purpose, assume the numerator in this equation is EBITDA Cash Taxes Capital Expenditures. 8 pts
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Finance Theory And Practice
Authors: Anne Marie Ward
2nd Edition
1907214259, 978-1907214257
