Sectors, Inc., has EBIT of $7,221,643 and interest expense of $611,800. Its depreciation for the year is $1,434,500. What is its cash coverage ratio? Round your final answer to two decimal places.
A) 15.42 times
B) 18.34 times
C) 14.15 times
D) None of the above

Question

Quizplus · Accepted Answer

Cash Coverage Ratio = (EBIT + Depreciation) / Interest Expense
= ($7,221,643 + $1,434,500) / $611,800
= 14.15 times (rounded to two decimal places)