On BeDeM Inc.'s 2023 income statement, you observe that: Sales= $212,000 Cost of Sales = $50,000 Depreciation and Amortization = $42,000 Other Income = $0 From BeDeM Inc.'s 2023 statement of cash flows, you observe that the firm distributed $39,000 as dividends to its stockholders, which was 75% of its net income in 2023. Given that the firm's operating expenses were $51,000 in 2023, and earnings are taxed at 21%. (a) Calculate the firm's EBITDA in 2023. (b) Find the firm's EBITDA/Interest Coverage ratio in 2023.
On BeDeM Inc.'s 2023 income statement, you observe that: Sales= $212,000 Cost of Sales = $50,000 Depreciation and Amortization = $42,000 Other Income = $0 From BeDeM Inc.'s 2023 statement of cash flows, you observe that the firm distributed $39,000 as dividends to its stockholders, which was 75% of its net income in 2023. Given that the firm's operating expenses were $51,000 in 2023, and earnings are taxed at 21%. (a) Calculate the firm's EBITDA in 2023. (b) Find the firm's EBITDA/Interest Coverage ratio in 2023.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
![On BeDeM Inc.'s 2023 income statement, you observe that:
Sales
$212,000
Cost of Sales = $50,000
Depreciation and Amortization
.
Other Income
$0
= $42,000
From BeDeM Inc.'s 2023 statement of cash flows, you observe that the firm distributed $39,000
as dividends to its stockholders, which was 75% of its net income in 2023.
Given that the firm's operating expenses were $51,000 in 2023, and earnings are taxed at 21%.
(a) Calculate the firm's EBITDA in 2023.
(b) Find the firm's EBITDA/Interest Coverage ratio in 2023.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F26f9d021-e17a-48f4-ba56-d0ca82ebd7cf%2F520ec105-9bc9-4277-975d-cd667fb4eab4%2Fg6d4ae5_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On BeDeM Inc.'s 2023 income statement, you observe that:
Sales
$212,000
Cost of Sales = $50,000
Depreciation and Amortization
.
Other Income
$0
= $42,000
From BeDeM Inc.'s 2023 statement of cash flows, you observe that the firm distributed $39,000
as dividends to its stockholders, which was 75% of its net income in 2023.
Given that the firm's operating expenses were $51,000 in 2023, and earnings are taxed at 21%.
(a) Calculate the firm's EBITDA in 2023.
(b) Find the firm's EBITDA/Interest Coverage ratio in 2023.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps with 4 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Foundations Of Finance](https://www.bartleby.com/isbn_cover_images/9780134897264/9780134897264_smallCoverImage.gif)
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
![Fundamentals of Financial Management (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781337395250/9781337395250_smallCoverImage.gif)
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
![Corporate Finance (The Mcgraw-hill/Irwin Series i…](https://www.bartleby.com/isbn_cover_images/9780077861759/9780077861759_smallCoverImage.gif)
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education