Can you show me the complete solution and detailed explaanation in solving the f

Question

Can you show me the complete solution and detailed explaanation in solving the ffg please step by step and use the formula I will be giving.

1. Times Interest Earned = EBIT/Interest charges (how to get interest charges?)

2. EBITDA = EBITDA + Lease Payments/Interest + Principal Payments = Lease Payments

Thank you!

ASSETS Cash and marketable securities Accounts receivable Inventories 2001 2000 LIABILITIES AND EQUITY 2001 2000 S 10 375 615 S 80 315 415 Accounts payable Notes payable Accruals S 60 110 140 S 30 60 130 $1,000 810 Total current liabilities 1,000 870 Long-term bonds s 310 220 54-580 Total current assets Net plant and equipment $1,064 S 800 ferred stock (400,000 s Common stock (50,000,000 shares) Retained earnings 130 766 S 896 $2,000 130 710 S 840 $1,680 Total common equity Total liabilities and equity S2,000 $1,680 lotal assets

Explanation / Answer

Answer for question no.1:

For year 2001:

Given EBIT =283.8.---------------(a)

Interest expense =88.--------------(b) (Interest charges are already present in the Income statement as "Interest" below EBIT).

Times interest earned is calculted by using the formula mentioned in the question =283.8/88

=3.225 times.

For the year 2000:

Given EBIT =263.---------------(a)

Interest expense =60.--------------(b) (Interest charges are already present in the Income statement as "Interest" below EBIT).

Times interest earned is calculted by using the formula mentioned in the question =(a)/(b)

=263/60

=4.38 times.

Answer for question no.2:

From the second equation it can be arrived that EBITDA = Lease payments. following the prinicipal A=B and B=C then A=C.

Therefore, lease payments = 383.8 for 2001 and 350 for 2000.

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