Jensen's Boats has sales of $387,000,cost of goods sold of $204,000,depreciation of $32,000,and selling and general costs of $21,000.The firm has a loan balance of $87,400 with an interest rate of 7 percent.What is the value of the interest bearing debt to EBITDA measure?

Question

Quizplus · Accepted Answer

EBITDA = $387,000 - 204,000 - 21,000 = $162,000Interest bearing debt/EBITDA = $87,400/$162,000 = .54 times

Jensen's Boats Has Sales of $387,000,cost of Goods Sold of $204,000,depreciation