The Lancaster Corporations income statement is given next. a. What is the times-interest-earned ratio? b. What would
Question:
The Lancaster Corporation’s income statement is given next.
a. What is the times-interest-earned ratio?
b. What would be the fixed-charge-coverage ratio?
LANCASTER CORPORATIONSales.............................................................................. $246,000
Cost of goods sold........................................................ 122,000
Gross profit................................................................... 124,000
Fixed charges (other than interest)............................... 27,500
Income before interest and taxes.................................. 96,500
Interest.......................................................................... 21,800
Income before taxes...................................................... 74,700
Taxes (35%).................................................................. 26,145
Income after taxes........................................................ $ 48,555
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Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
