Question

With the following information Calculate:

• Profits before and after taxes
• Change in cash
• EBITD
• Coverage ratio

REVENUE                      400,000

OPERATING COSTS        250,000

DEPRECIATION              25,000

INTEREST                      20,000

PROFITS TAX                 20%

PLEASE SHOW ALL WORK

Answer 1

S.No	Particulars	Amount
A	Revenue	400000.00
B	Operting Cost	250000.00
C	EBITD( A-B)	150000.00
D	Depreciation	25000.00
E	Interest	20000.00
F	Profit Before Tax( C-D-E)	105000.00
G	Tax @ 20% on F	21000.00
H	Profit After Tax ( F-G)	84000.00

From the Above table we can tell that

Profit Before Tax = 105000

Profit After Tax = 84000

Change in Cash = Net profit + Depreciation

= 84000+25000

= 109000

Change in Cash is 109000

* Assumming all the other expenses are paid in Cash

EBITD = 150000

Computation of Coverage ratio:

We know that Coverage ratio = EBITD / Interest

= 150000/20000

= 7.5 Times

Hence Covergae ratio is 7.5 times

Particulars	Amount
Profit Before Tax	105000.00
Profit After Tax	84000.00
Change in Cash	109000
EBITD	150000
Coverage Ratio	7.5 Times

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