The formula for calculating the coverage ratio

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Reference no: EM1389837

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

Income Statement Data Year 12 (in 000s)

Net Revenues from Footwear Sales $ 330,000

Cost of Pairs Sold 240,000

Warehouse Expenses 15,000

Marketing Expenses 35,000

Administrative Expenses 8,000

Operating Profit (Loss) 32,000

Interest Income (expenses) (10,000)

Pre-tax Profit (Loss) 22,000

Income Taxes 6,600

Net Profit (Loss) $ 15,400

Based on the above income statement data and the formula for calculating the coverage ratio presented on the Help screen of the Footwear Industry Report, the company's interest coverage ratio is

A. 3.20.

B. 1.54.

C. 2.20.

D. 330.0.

E. None of the above.

Reference no: EM1389837

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