how many times can the Johnson Corporation cover their interest expenses if the firm has sales...
how many times can the Johnson Corporation cover their interest expenses if the firm has sales of $3,000,000, total assets of $2,100,000, EBIT equal to $1,000,000, a tax rate of 40% and interest expense of $250,000?
Homework Answers
Interest coverage ratio = Earnings before Interest and taxes / interest Expenses
Earnings before Interest and taxes = $1,000,000
Interest expense = $250,000
Interest coverage ratio = $1,000,000 / $250,000
Interest coverage ratio = 4 times
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how many times can the Johnson Corporation cover their
interest expenses if the firm has sales...
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