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Terrell, Inc.’s net income for the most recent year was $16,550. The tax rate was 22...

Terrell, Inc.’s net income for the most recent year was $16,550. The tax rate was 22 percent. The firm paid $3,970 in total interest expense and deducted $5,300 in depreciation expense. What was the company’s cash coverage ratio for the year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

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Answer #1
Net Income $         16,550
Tax rate 22%
Income before tax 16550/(1-22%)
Income before tax $    21,217.95
Add Interest $      3,970.00
Depreciation $      5,300.00
Income before depreciation, interest and tax $    30,487.95
Interest $      3,970.00
Cash coverege rate= Income before depreciation, interest and tax/Interest
Cash coverege rate= 30487.95/3970
Cash coverege rate=                 7.68
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