Question: Calculate the fixed burden coverage and cash-flow-to-debt ratio given the following: EBIT = $700,000; depreciation and amortization = $60,000; preferred dividend $50,000; sinking fund payments

Calculate the fixed burden coverage and cash-flow-to-debt ratio given the following: EBIT = $700,000; depreciation and amortization = $60,000; preferred $50,000; sinking fund payments = $10,000; tax rate = 20%; debt = $200,000. Why do analysts use EBITDA more often than EBIT?

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