In 2016, Natural Selection, a nationwide computer dating service, had $532 million of assets and $216 million of liabilities. Earning before interest and taxes were $136 million, interest expense was $29.5 million, the tax rate was 40 percent, principal repayment requirements were $25.6 million, and annual dividends were 35 cents per share on 22 million shares outstanding. a. Calculate the following for Natural Selection: (Round your answers to 2 decimal places.) Liabilities-to-equity ratio Times-interest-earned ratio Times burden covered
In 2016, Natural Selection, a nationwide computer dating service, had $532 million of assets and $216 million of liabilities. Earning before interest and taxes were $136 million, interest expense was $29.5 million, the tax rate was 40 percent, principal repayment requirements were $25.6 million, and annual dividends were 35 cents per share on 22 million shares outstanding. a. Calculate the following for Natural Selection: (Round your answers to 2 decimal places.) Liabilities-to-equity ratio Times-interest-earned ratio Times burden covered
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I need the last part and the answer is not 68.9. That is incorrect. Please solve the problem and write out all steps. I only need the last part answered please.
Transcribed Image Text:In 2016, Natural Selection, a nationwide computer dating service, had $532 million of assets and $216 million of liabilities. Earnings
before interest and taxes were $136 million, interest expense was $29.5 million, the tax rate was 40 percent, principal repayment
requirements were $25.6 million, and annual dividends were 35 cents per share on 22 million shares outstanding.
a. Calculate the following for Natural Selection: (Round your answers to 2 decimal places.)
Liabilities-to-equity ratio
Times-interest-earned ratio
Times burden covered
b. What percentage decline in earnings before interest and taxes could Natural Selection have sustained before failing to cover:
(Round your answers to 1 decimal place.)
Interest payment requirements?
%
Principal and interest requirements?
96
Principal, interest, and common dividend payments?
%6
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