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    Times-interest earned, EBITDA coverage ratios

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    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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    https://brainmass.com/business/financial-ratios/times-interest-earned-ebitda-coverage-ratios-73679

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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

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