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Times-interest earned, EBITDA coverage ratios

I have attached 2 files. The first file has a problem is a balance sheet that needs some corrections for the 2003 and 2004 year and calculations for 2005. Some additional questions are asked which are attached in the file.

The attached file which is the Word file on Brinker needs to be set-up and answered the same way the first attached file was, using the same questions in the attached Ratio file. Please refer to pages 38 and 39 of the file for the financial information.

Any additional information on Brinker can be found on Yahoo finance. Brinker stock is symbolized as EAT.

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Input Data:
2003 2004 2005
Year-end common stock price $8.50 $6.00 $12.17
Year-end shares outstanding 100,000 100,000 250,000
Tax rate 40% 40% 40%
EPS $0.880 $0.110 $0.220
DPS $0.220 $0.110 $0.220
Book value per share $6.638 $5.576 $7.909
Lease Payments $40,000 $40,000 $40,000

Balance Sheets

Assets 2003 2004 2005
Cash and equivalents $9,000 $7,282 $14,000
Short-term investments $48,600 $20,000 $71,632
Accounts receivable $351,200 $632,160 $878,000
Inventories $715,200 $1,287,360 $1,716,480
Total current assets $1,124,000 $1,946,802 $2,680,112
Net plant and equipment $344,800 $939,790 $836,840
Total assets $1,468,800 $2,886,592 $3,516,952

Liabilities and equity
Accounts payable $145,600 $324,000 $359,800
Notes payable $200,000 $720,000 $300,000
Accruals $136,000 $284,960 $380,000
Total current liabilities $481,600 $1,328,960 $1,039,800
Long-term bonds $323,432 $1,000,000 $500,000
Total debt $805,032 $2,328,960 $1,539,800
Preferred stock (400,000 shares) $0 $0 $0
Common stock (50,000,000 shares) $460,000 $460,000 $1,680,936
Retained earnings $203,768 $97,632 $296,216
Total common equity $663,768 $557,632 $1,977,152
Total liabilities and equity $1,468,800 $2,886,592 $3,516,952

Income Statements

2003 2004 2004
Net sales $3,432,000.0 $5,834,400.0 $7,035,600.0
Operating costs $3,204,000.0 $5,700,000.0 $6,412,960.0
Earnings before interest, taxes, & depr. (EBITDA) $228,000.0 $134,400.0 $622,640.0
Depreciation $18,900.0 $116,960.0 $120,000.0
Earnings before interest and taxes (EBIT) $209,100.0 $17,440.0 $502,640.0
Less interest $62,500.0 $176,000.0 $80,000.0
Earnings before taxes (EBT) $146,600.0 -$158,560.0 $422,640.0
Taxes (40%) $58,640.0 -$63,424.0 $169,056.0
Net Income before preferred dividends $87,960.0 -$95,136.0 $253,584.0
Preferred dividends $4.0 $4.0 $4.0
Net Income available to common ...

Solution Summary

This provides the steps to calculate the times-interest earned, EBITDA coverage ratios and other ratios

$2.19