ZoomerMedia Limited is a multimedia company that serves the 45-plus Zoomer demographic through television, radio, magazine, Internet,

ZoomerMedia Limited is a multimedia company that serves the 45-plus €œZoomer€ 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 €œa.€ Be sure to comment from the perspectives of an existing shareholder and a potential lender of long-term debt.

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ZOOMERMEDIA LIMITED'S 2013 CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) ECXHHBIT 10-15A ZOOMERMEDIA LIMITED Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) For the years ended June 30, 2013 and 2012 2013 2012 (revised Note 7) Revenue Operating expenses (Note 14) Depreciation Amortization of the other intangible assets Impairment of goodwill and broadcast licenses Operating income (loss) Interest income Interest expense Net interest expense Net income (loss) before income taxes Income tax recovery (Note 12) Net income (loss) and comprehensive income (loss) for the year $ 56,424,047 47,949,596 1,909,597 1,076,365 2,820,881 2,667,608 (79,391) 2,561,431 2,482,040 185,568 S 55,976,785 48,921,614 3,446,938 1,010,787 5,450,796 (2,853,350) (2,183) 2,179,649 2,177,466 (5,030,816) (1,471,428) (3,559,388) (5,122,516) 5,308,084 Net income (loss) per share (basic and diluted) (Note 16) Weighted average number of shares outstanding 0.01 655,247,197 (0.01) 655,116,857 ZOOMERMEDIA LIMITED'S 2013 CONSOLIDATED STATEMENTS OF EXHBIT 10-15B FINANCIAL POSITION June 30, 2013 June 30, 2012 (revised Note 7) ASSETS Current assets 5,069,754 Cash Restricted cash and investments (Note 5) Trade and other receivables (Note 4) Prepaid expenses $ 2,829,733 5,921,642 13,227,045 538,751 22,517,171 13,876,209 523,101 19,469,064 ZOOMERMEDIA LIMITED'S 2013 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (continued) EKHIBIT 10-15B June 30, 2013 June 30, 2012 (revised Note 7) Non-current assets Restricted cash and investments (Note 5) Property and equipment (Note 6) Deferred tax assets (Note 12) Intangible assets (Note 7) Goodwill (Note 7) 22,851,545 6,817,751 31,332,207 2,574,758 S86,093,432 6,420,758 21,585,161 777,967 36,321,291 2,574,758 $87,148,999 TOTAL ASSETS LIABILITIES Current liabilities Trade and other payables (Note 23) Deferred revenue (Note 8) Income tax liabilities (Note 12) Current portion of debt (Nots ad 23) Current portion of other liabilities (Note 10) Current portion of provisions (Note 11) 7,071,876 2,171,731 802,387 10,921,518 2,472,870 567,940 24,008,322 S 7,433,607 2,142,306 160,996 1,895,200 6,747,779 619,310 18,999,198 Non-current liabilitios Deferred revenue (Note 8) Deferred tax liabilities (Note 12) Debt (Note 9) Other liabilities (Note 10) Provisions (Note 11) 1,064,453 238,500 22,538,372 332,762 146,749 48,329,158 1,224,496 439,316 33,403,709 471,936 403,540 54,942,195 EQUITY Equity attributable to owners of the parent Share capital Contributed surplus Deficit 63,491,613 2,205,372 (27,932,711) 37,764,274 $86,093,432 63,411,344 2,036,255 (33,240,795) 32,206,804 $87,148,999 Total equity TOTAL LIABILITIES AND EQUITY Commitments and contingencies (Note 21)