# Times-interest-earned ratio/fixed-charge-coverage ratio

Please see the attached file.

Page 77, 20. The Lancaster Corp's income statement is given on page 78.

a) What is the times-interest-earned ratio?

b) What would be the fixed-charge-coverage ratio?

Sales 200,000

Cost of goods sold 116,000

Gross profit 84,000

Fixed charges (other than interest) 24,000

Income before interest and taxes 60,000

Interest 12,000

Income before taxes 48,000

Taxes (35%) 16,800

Income and taxes 31,200

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Page 77, 20. The Lancaster Corp's income statement is given on page 78.

a) What is the times-interest-earned ratio?

b) What would be the ...

#### Solution Summary

The solution contains calculations of Times-interest-earned ratio and fixed-charge-coverage ratio

$2.19