Homework Answers
Chutes and Co:
Total Sales = $ 29.1 million, Operating Margin = 10.6 %
Operating Margin = EBIT / Total Sales = 10.6 %
NOTE: EBIT is Operating Income in this case
EBIT = Operating Income = Operating Margin x Total Sales = 0.106 x 29.1 = $ 3.0846 million
Interest Expense = $ 1.63 million
Interest Coverage Ratio = EBIT / Interest Expense = 3.0846 / 1.63 = 1.89
NOTE: Please raise a separate query for the solution to the remaining unrelated question as one query is restricted to the solution of only complete question with a maximum of four sub-parts.
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