Can you help me find the accurate solution to this financial accounting problem using valid principles? OmniTech Inc. has $12,000 in total assets, depreciation of$2,500, and interest of $1,800. The total asset turnoverrate is 1.3. Earnings before interest and taxes are equal to25 percent of sales. What is the cash coverage ratio?

Step 1: Define Cash Coverage RatioThe Cash Coverage Ratio measures a firm's ability to pay its…

Answered: OmniTech Inc. has $12,000 in total…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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OmniTech Inc. has $12,000 in total assets, depreciation of $2,500, and interest of $1,800. The total asset turnover rate is 1.3. Earnings before interest and taxes are equal to 25 percent of sales. What is the cash coverage ratio?