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Inessa [10]
2 years ago
14

A firm has sales of $215,600, costs of $124,800, interest paid of $3,600, and depreciation of $11,400. the tax rate is 34 percen

t. what is the value of the cash coverage ratio?
Business
1 answer:
Tju [1.3M]2 years ago
6 0

Cash Coverage ratio indicates if a firm has enough cash to pay of its interest expenses. The ideal ratio to be maintained by a firm is 1:1. This can be given by the following formula:

Cash Coverage Ratio=\frac{Earnings before Interest and Tax+Depreciation }{Interest Expense}

Cash Coverage Ratio=\frac{215600-124800+11400}{3600}

Cash Coverage Ratio=28.38

Assumption: Cost includes Depreciation, thus depreciation is added back, To find Cash Profits before Interest and Taxes.


You might be interested in
Pettijohn Inc. The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization
Tom [10]

Answer:

The appropriate solution is "$2.91". A further explanation is given below.

Explanation:

Seems that the given question is incomplete. Below is the attachment of the full problem.

According to the question,

Common dividend,

= 509.83

Shares outstanding,

= 175

Now,

The dividend per share will be:

=  \frac{Common \ dividend}{Shares \ outstanding}

On substituting the values, we get

=  \frac{509.83}{175}

=  2.9133

or,

=  2.91

8 0
1 year ago
If a product is repaired under warranty, the seller would record a journal entry that includes a ________.a. debit to Product Wa
Anastaziya [24]

Answer: Debit to Product Warranty Payable

Explanation: Product Warranty Payable is a liability account that has a credit balance. To increase a liability a credit is recorded while to reduce a liability a debit is recorded to the liability.

The seller maintains the warranty as a liability and initially records a debit to its product warranty expense and a credit to its product warranty Payable.

When a repair is done on a product under warranty, the seller records a debit to the product warranty Payable to reduce it’s liability.

Also, a debit to either supplies or cash will increase the expense and assets accounts respectively which will amount to incorrect journal entries.

8 0
2 years ago
Which of the following terms refers to the study of how organizations function and how they affect and are affected by the envir
Alborosie

Answer:

d. Organizational environment

Explanation:

Indeed, organizational environmental studies how a particular organization is affected by it's operating environment, and how the organization functions under that environment.

Note also that the organizational environment is further divided into:

- the internal environment and

- the external environment

Put simply, the internal environment consist of factors that affect the organization from within; which are controllable. However, the external environment consist of factors such as political instability, etc that can affect the organization and beyond the control of the organization.

7 0
2 years ago
Drew buys 100 shares of Balsamic Corporation for $23 per share. Over the next year, Balsamic pays four quarterly dividends of 35
lara31 [8.8K]

Answer:

14.78%

Explanation:

Drew's total investment = $23 x 100 = $2,300

during the year he received 4 dividend payments = 4 x 100 shares x $0.35 per share = $140

since the stock price increased, Drew's investment is now worth $2,500

if Drew was to sell his stocks, he would earn $200 + the $140 received as dividends = $340

Drew's annual return = $340 / $2,300 = 14.78%

4 0
2 years ago
Does PepsiCo’s portfolio exhibit good resource fit? What are the cash flow characteristics of each of PepsiCo’s six segments? Wh
Snowcat [4.5K]

Answer:

Yes, PepsiCo’s portfolio exhibit good resource fit.

The cash flow characteristics of PepsiCo's six segments are

  • Ability to scout for future acquisitions.
  • Good credits and return on Investment.
  • Reinvestment in the development of business
  • Ability to pay off expenses
  • Ability to provide a buffer against future financial challenges
  • Good sales in and out of season,

The strongest contributors to PepsiCo is:

Frito-Lay North America (FLNA), Quaker Foods North America (QFNA), North America Beverages (NAB), Latin America, Europe Sub-Saharan Africa (ESSA), and Asia, Middle East and North Africa (AMENA)

Frito-Lay ratings is good in that it accounts for 29% of PepsiCo's total revenue as at Septemeber 2019  report.

8 0
2 years ago
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