Calculate the company interest coverage ratio

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Reference no: EM132149979

Question - Assume a company's Income Statement for Year 12 is as follows:

Income Statement Data	Year 12 (in 000s)
Net Revenues from Footwear Sales	$ 300,000
Cost of Pairs Sold	190,000
Warehouse Expenses	15,000
Marketing Expenses	40,000
Administrative Expenses	8,000
Operating Profit (Loss)	47,000
Interest Income (expenses)	(10,000)
Pre-tax Profit (Loss)	37,000
Income Taxes	11,100
Net Profit (Loss)	$ 25,900

Based on the above income statement data (assume interest income is zero), the company's interest coverage ratio is

a) 30.0.

b) 4.70.

c) 2.59.

d) 3.70

Reference no: EM132149979

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