In 2020, Natural Selection, a nationwide computer dating service, had $502 million of assets and $201 million of liabilities. Earnings before interest and taxes were $121 million, interest expense was $29 million, the tax rate was 40 percent, principal repayment requirements were $25 million, and annual dividends were 25 cents per share on 20 million shares outstanding. What percentage decline in earnings before interest and taxes could Natural Selection have sustained before failing to cover: Note: Round your answers to 1 decimal place. Interest payment requirements? Principal and interest requirements? Principal, interest, and common dividend payments?

In 2020, Natural Selection, a nationwide computer dating service, had $502 million of assets and $201 million of liabilities. Earnings before interest and taxes were $121 million, interest expense was $29 million, the tax rate was 40 percent, principal repayment requirements were $25 million, and annual dividends were 25 cents per share on 20 million shares outstanding. What percentage decline in earnings before interest and taxes could Natural Selection have sustained before failing to cover: Note: Round your answers to 1 decimal place. Interest payment requirements? Principal and interest requirements? Principal, interest, and common dividend payments?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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d In 2020, Natural Selection, a nationwide computer dating service, had $514 million of assets and $207 million of Babies. Earnings before Interest and taxes were $127 million, interest expense was $28.5 million, the tax rate was 40 percent, principal repayment requirements were $24.7 million, and annual dividends were 25 cents per share on 20 million shares outstanding a. Calculate the following for Natural Selection: Note: Round your answers to 2 decimal places. Liabilities-to-equity ratio Times-interest-earned ratio Times burden covered b. What percentage decline in earnings before interest and taxes could Natural Selection have sustained before failing to cover Note: Round your answers to 1 decimal place. Interest payment requirements? Principal and interest requirements? Principal, interest, and common dividend payments? % % %
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