Interest-bearing debt outstanding

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ABC has 12,535,000 of interest-bearing debt outstanding, and it pays an interest rate of 5.6 percent annually on that debt. ABC's annual sales are 38,107,000 and its average tax rate is 40 percent. The company has a net profit margin of 8.8 percent. If the company does not maintain a TIE ratio of at least 4.00 then the bank will refuse to renew its loan and bankruptcy will result. What is ABC's TIE ratio today, given these numbers? Show your answer to two decimal places.

Reference no: EM131859517

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