Use the Following Data to Answer the Question: What Are

Use the following data to answer the question: What are the three interest coverage ratios based on pretax income and interest expense? $\begin{array}{|l|l|l|} \hline& 2015 & 2016 \\\hline \text { Current assets } & \$ 860 & \$ 896 \\\hline \text { Current liabilities } & 710 & 818 \\\hline \text { Debt in current liabilities } & 1 & 39 \\\hline \text { Lurkg-term debt } & 506 & 408 \\\hline \text { Total assets } & 2,293 & 2,307 \\\hline \text { Capilal experuditures } & 111 & 117 \\\hline \text { Change in deferred taxes } & 29 & -20 \\\hline \text { Sales } & 4,100 & 4,192 \\\hline \text { Operating expenses } & 3,307 & 3,260 \\\hline \text { Rental expense } & 0 & 248 \\\hline \text { Gerieral expenses } & 562 & 528 \\\hline \text { Depreciation } & 139 & 136 \\\hline \text { Iriterest experise } & 39 & 30 \\\hline \text { Incuere taxes } & 5 & 8 \\\hline\end{array}$

A) For 2016,interest coverage ratios based on EBIT,EBITDA,and EBITDAR are 5.47,5.47,and 1.48,respectively.
B) For 2016,interest coverage ratios based on EBIT,EBITDA,and EBITDAR are 2.36,5.92,and 13.73,respectively.
C) For 2016,interest coverage ratios based on EBIT,EBITDA,and EBITDAR are 0.93,5.47,and 1.48,respectively.
D) For 2016,interest coverage ratios based on EBIT,EBITDA,and EBITDAR are 0.93,5.47,and 13.73,respectively.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free