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Chutes​ & co. has interest expense of $1.55 million and an operating margin of 10.5% on total sales of $29.8 million. what is​ chutes' interest coverage​ ratio

Respuesta :

TomShelby

Answer:

times interest earned or interest coverage ratio = 2.02

Explanation:

operating margin 10.5%

operating income/ sales = 10.5%

operating income = sales x 10.5% =  3,129,000

operating income / interest expense

3,129,000/1,550,000 = 2.018709677 = 2.02

The company can pay their interest two times.

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