ZoomerMedia Limited is a multimedia company that serves the 45 plus
ZoomerMedia Limited is a multimedia company that serves the 45-plus “Zoomer” demographic through television, radio, magazine, Internet, conferences, and tradeshows. Exhibits 10-15A and B contain excerpts from ZoomerMedia’s 2013 annual report.
Required:
a. Calculate the debt to equity ratio, the net debts as a percentage of total capitalization ratio, and the interest coverage ratio for the years ending June 30, 2013 and 2012. Note: Impairment charges should be treated like amortization when determining EBITDA.
b. Identify the major factors that caused the changes in these ratios.
c. Write a short report commenting on the results of the ratio calculations in part “a.” Be sure to comment from the perspectives of an existing shareholder and a potential lender of long-term debt.
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