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Calculating the Cash Coverage Ratio (LO2] Sherwood Inc.s net income for the most recent year was $13,168. The tax rate was 3
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Cash coverage ratio = Earing before interest tax and depreciation / Interest expenses
i Net income = 13,168.00
ii=i/(1-34%) Profit before tax = 19,951.52
iii Interest     3,605.00
iv Depreciation     2,382.00
v Earning before interest tax and depreciation 25,938.52
vi Interest     3,605.00
vii=v/vi Cash coverage ratio =             7.20
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