Calculate the following ratios from the data given below: 1. Debt ratio 2. Debt service coverage multiples
Question:
Calculate the following ratios from the data given below:
1. Debt ratio
2. Debt service coverage multiples
3. Interest coverage
Balance Sheet 12/31/2014
Assets
Cash……………………………..$575,000
Short-term investments…………250,000
Accounts Receivable…………….964,000
Inventory…………………………650,000
Prepaid Expenses………………100,000
Total Current Assets………………$2,539,000
Autos and trucks…………………$65,000
Furniture and Fixtures……………327,000
Property, Plant, and Equipment
(Net of depreciation) ……………..4,480,000
Other long-term assets…………….710,000
Total Long-Term Assets…………..$5,582,000
Total Assets……………………….$8,121,000
Liabilities
Accounts Payable…………………$950,000
Notes Payable ………………….…520,000
Current Portion of LT Debt………637,000
Other Payables……………………60,000
Total Current Liabilities………….$2,167,000
Long-Term Debt
(Net of current portion) …………$3,110,000
Total Liabilities…………………$5,277,000
Equity
Capital Stock……………………140,000
Additional Paid-In Capital………650,000
Retained Earnings………………2,054,000
Total Shareholders’ Equity…………$2,844,000
Total Liabilities and Equity………$8,121,000
Income Statement January 1, 2014 to December 31, 2014
Net Sales……………………………$8,427,345
Cost of Goods Sold…………………4,638,987
Gross Profit…………………………$3,788,358
Operating Expenses…………………1,989,375
Interest Expense……………………346,000
Depreciation Expense……………….387,000
Total Operating Expenses…………..$2,722,375
EBIT………… ………… ………… (1,411,983)
EBITDA………… ………… ………(1,798,983)
Net Profit……………………………$1,065,983
Other Data
Shares Outstanding…………1,000,000
Market price per share…………$14.27
Earnings per share…………$1.07
Book value per share…………$2.84
Expert Answer:
Financial Markets and Institutions
ISBN: 978-0077861667
6th edition
Authors: Anthony Saunders , Marcia Cornett
