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Homework answers / question archive / Assess Rylan’s ability to meet its interest obligations by calculating interest coverage ratios using both EBIT and EBITDA
Assess Rylan’s ability to meet its interest obligations by calculating interest coverage ratios using both EBIT and EBITDA.
Income Statement
|
|
2012 2011 |
|
Revenues |
$500,000,000 $450,000,000 |
|
Less: Cost of Goods Sold |
$225,000,000 $200,000,000 |
|
Gross Profit |
$275,000,000 $250,000,000 |
|
Less: Operating Expenses |
$150,000,000 $140,000,000 |
|
EBITDA |
$125,000,000 $110,000,000 |
|
Less: Depreciation |
$25,000,000 $22,500,000 |
EBIT
Less: Interest Expense
EBT
Less: Taxes (40%)
|
$100,000,000 |
$87,500,000 |
|
$10,000,000 |
$9,000,000 |
|
$90,000,000 |
$78,500,000 |
|
$36,000,000 |
$31,400,000 |
Net Income $54,000,000 $47,100,000
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