Question 3 a) The net profit of Rexit Autos Inc. for the most recent year...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Question 3 a) The net profit of Rexit Autos Inc. for the most recent year available was $6,250. The tax rate reached 34%. The company paid $2,235 in interest and deducted $1,450 in depreciation for the year. What was the company's pre-amortization interest coverage ratio for that year? b) Here is some information about a company's last fiscal year. Sales are $250,000, cost of goods sold $80,000, depreciation for the year $27,000 and additions to retained earnings $33,360. Currently 20,000 common shares of this company are outstanding and, the previous year, each yielded $1.50 in dividends. Assuming the tax rate is 34%, determine the interest coverage ratio for the last fiscal year. c) Based on the two previous problems, draw up a provisional balance sheet which indicates the external financing required. Assume that revenue will increase by 15%, but the company will not incur any new external debt or resort to equity financing.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
