E Corporation 2008 and 2009 Balance Sheets ($ in million) IE Corporation 2009 In

Question

E Corporation 2008 and 2009 Balance Sheets ($ in million) IE Corporation 2009 Income Statement in milliorn Sales Cost of goods sold Depreciation Earnings before interest and taxes Interest paid Taxable income Taxes (34% Net income 4,053 2,780 550 723 502 221 75 146 20082009 ASSETS Current Assets: Cash Accounts receivable Invento 210 215 355 310 507328 1,072 853 Total Current Assets Fixed Assets: Net plant and equipment TOTAL ASSETS Dividends 47 6,085 6,527 7,157 7,380 Addition to retained earnings LIABILITIES and OWNERS' EQUITY Current Liabilities: Accounts payable Notes payable 207298 1,715 1,427 1,922 1,725 1,9872,308 Total Current Liabilities Long-term debt Owners' equity Assignment 2 Common stock Retained earnings 1,000 1,000 2,248 2,347 3,248 3.347 TOTAL LIABILITIES and OWNERS' EQUIT 7,157 7,380 Total Owners' Equity

Explanation / Answer

EBITDA Coverage Ratio = (EBITDA + Lease Payments) / (Interest payment + Principal repayment + Lease Payment)

EBITDA (In Million $) = 146 + 75 + 502 + 550 = $1,273

EBITDA Coverage Ratio = (1273 + 0) / (502 + 0 + 0) = 2.54

Note:  Lease Payments and Principal repayment is not given in question hence 0.

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