Gemmates Solutions pays a 12% rate of interest on $15 million of outstanding debt with a face value of $15 million. The firm's EBIT was $3.5 million. If depreciation is $300,000, what is its cash coverage ratio?

Gemmates Solutions pays a 12% rate of interest on $15 million of outstanding debt with a face value of $15 million. The firm's EBIT was $3.5 million. If depreciation is $300,000, what is its cash coverage ratio?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 2P: Vigo Vacations has $200 million in total assets, $5 million in notes payable, and $25 million in...

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Question

What is its cash coverage ratio of this financial accounting question?

Gemmates Solutions pays a 12% rate of interest on $15 million of outstanding debt
with a face value of $15 million. The firm's EBIT was $3.5 million. If depreciation is
$300,000, what is its cash coverage ratio?

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