Homework Help is Here – Start Your Trial Now!
Business
Accounting
Please answer as thoroughly as possible. This is a huge refresher for me and I will use your explanations to compare to my own work if I do not get the correct answe

Please answer as thoroughly as possible. This is a huge refresher for me and I will use your explanations to compare to my own work if I do not get the correct answe

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
100%

Please answer as thoroughly as possible. This is a huge refresher for me and I will use your explanations to compare to my own work if I do not get the correct answer. Thank you! 

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-eamed 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? Principal, interest, and common dividend payments?
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-eamed 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? Principal, interest, and common dividend payments?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Financial Planning
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS