Question

for the most recent year Seether, inc had sales of 449000

connect Chapter 3 Homework Instructions help • Save & Submit 11. 33 points For the most recent year. Seether Inc had sales of $449000, cost of goods some of $218.200 depreciation expense of $57.900, and additions to retained earnings of $50.100. The fem currently has 34.000 shares of common stock outstanding and the previous year's dividends per share were $1.45 Assuming a 32 percent income tax rate what was the times interesteamed rabo? Do not round intermediate ca sons and round your answer to 2 decimal places, 3216) Times westeaed References eBook & Resources Worksheet Learning obiective as 02 Compute and more important interpret some common mos Die intermediate section 3.2 Rato Analysis

Answer 1

Answer: Income Statement Sales Cost of Goods Sold Depreciation Expense EBIT Interest Expense Earnings before Taxes Taxes Net Income Dividend Addition to Retained Earnings 449,000.00 218,200.00 57,900.00 172,900.00 26,723.53 146,176.47 46,776.47 99,400.00 49,300.00 50,100.00

Calculation:
Dividend = 34,000 * $1.45
Dividend = $49,300.00

Addition to Retained Earnings = Net Income – Dividend
$50,100.00 = Net Income - $49,300.00
Net Income = $99,400.00

Net Income = Earnings before Taxes * (1 – Tax Rate)
$99,400.00 = Earnings before Taxes * (1 – 0.32)
Earnings before Taxes = $146,176.47

Taxes = Earnings before Taxes * Tax Rate
Taxes = $146,176.47 * 0.32
Taxes = $46,776.47

Interest Expense = EBIT - Earnings before Taxes
Interest Expense = $172,900.00 - $146,176.47
Interest Expense = $26,723.53

Times Interest Earned = EBIT / Interest Expense
Times Interest Earned = $172,900.00 / $26,723.53
Times Interest Earned = 6.47 times