Based on the above income statement data and the formula for calculating the interest coverage ratio presented in the Help section for p. 5 of the Footwear Industry Report, the company’s interest coverage ratio is
29.0.
3.00.
2.10.
2.20.
4.00.
Based on the above income statement data and the formula for calculating the interest coverage ratio presented in the Help section for p. 5 of the Footwear Industry Report, what is the company’s interest coverage ratio?
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To calculate the interest coverage ratio, you use the formula:
Interest Coverage Ratio = Earnings Before Interest and Taxes (EBIT) / Interest Expense
To provide the correct answer, you’ll need the values for EBIT and the interest expense from the income statement data.
1. Locate the EBIT value from the income statement.
2. Find the total interest expense.
3. Divide EBIT by the interest expense.
Once you perform this calculation, you’ll find the appropriate interest coverage ratio among the options you provided. If you have the EBIT and interest expense values, I can help guide you through the calculation. Make sure to follow this method for accurate results!