Homework Answers
1.
Times Interest Earned = EBIT/Interest Expense
EBIT = PreTax earnings + Interest = 4419 + 552 = 4971
Times Interest Earned = 4971/552 = 9.005
2.
EBITDA Coverage = EBITDA/ Interest
EBITDA = EBIT + Depreciation & Amortization
= 4971+ 1484 = 6455
EBITDA Coverage = 6455/552 = 11.69
3.
Operating Cash Flow to Debt = Operating Cash Flow/Long Term Debt
=4784/11545 = 0.41
4.
Free Cash Flow to Debt = Free Cash Flow/Long Term Debt
Free Cash Flow = Operating Cash Flow - Capital Expenditure
= 4784 - 1197 = 3587
Free Cash Flow to Debt = 3587/11545 = 0.31
5.
Current ratio = Current Assets/Current Liabilities
= 10561/10492 = 1.006
6.
Quick Ratio = (Current Assets - inventories)/Current Liabilities = (10561-9458)/10492 = 0.101
7.
Liabilities to Equity Ratio = Total Liabilities/Total Equity
= 23612/7654 = 3.085
8.
Total debt to Equity Ratio = (Long Term debt + Short Term Debt)/Total Equity
= (11545 + 1104)/7654 = 1.652
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