Question: Hello, I need help finding the interest coverage ratio for year 2. I tried (Sales-COGS)/Interest Expense [ (3,018 - 1,500)/140 = 10.84 ] but it's
Hello, I need help finding the interest coverage ratio for year 2. I tried (Sales-COGS)/Interest Expense [ (3,018 - 1,500)/140 = 10.84 ] but it's not the right answer; then, I tried out (Total Revenues - COGS - Operating Expenses)/Interest Expense [ (3,018 - 1,500 - 466)/140 = 7.51 ] but it's not the answer either. Can you help me out? Thanks!

Use the information in the table below to calculate the following ratios for Windswept Woodworks for year 1 and year 2. (Round your answers to 2 decimal places.) Year 1 404 850 6,652 148 1,140 na Windswept Woodworks, Inc. Input Data (millions of dollars) Year 2 Accounts payable 460 Accounts receivable 1,304 Accumulated depreciation 6.770 Cash & equivalents 248 Common stock 1 208 Cost of goods sold 1,500 Depreciation expense Common stock dividends paid Interest expense 140 Inventory 1,038 Addition to retained earnings 602 Long-term debt 836 Notes payable 230 Gross plant & equipment 10.260 Retained earnings 3,086 Sales 3,018 Other current liabilities 116 Tax rate 34% Market price per share - year end $ 19.80 Number of shares outstanding 500 million na n.a. n.a 1,046 n.a 756 380 10,000 2,496 n.a 96 S n.a. 17.50 500 million a. Interest coverage ratio (Assume that year 1 EBIT was 1,297 and year 1 interest expense was 120.) Year 2 interest coverage ratio Year 1 interest coverage ratio 10.83
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