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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subject-Accounting
![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?
%
%
+%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc7fe5a73-45e4-4166-8ba1-50e355550dfc%2F10b1af52-25e6-4029-96fc-c34c90266a0f%2Fsw5h3kq_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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?
%
%
+%
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