In 2020, Natural Selection, a nationwide computer dating service, had $522 million of assets and $211 million of liabilities. Earnings before interest and taxes were $131 million, Interest expense was $28 million, the tax rate was 40 percent, principal repayment requirements were $25.1 million, and annual dividends were 20 cents per share on 21.5 million shares outstanding. a. Calculate the following for Natural Selection: Note: 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: Note: Round your answers to 1 decimal place. Interest payment requirements? Principal and interest requirements? Principal, interest, and common dividend payments? ***** % %
In 2020, Natural Selection, a nationwide computer dating service, had $522 million of assets and $211 million of liabilities. Earnings before interest and taxes were $131 million, Interest expense was $28 million, the tax rate was 40 percent, principal repayment requirements were $25.1 million, and annual dividends were 20 cents per share on 21.5 million shares outstanding. a. Calculate the following for Natural Selection: Note: 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: Note: Round your answers to 1 decimal place. Interest payment requirements? Principal and interest requirements? Principal, interest, and common dividend payments? ***** % %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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