Condensed Financial Data Are Presented Below for the Phoenix Corporation

question 29

Multiple Choice

Condensed financial data are presented below for the Phoenix Corporation:
$\begin{array}{lrr}&2014&2013\\\text { Accounts receivable } & \$ 267,500 & \$ 230,000 \\\text { Inventory } & 312,500 & 257,500 \\\text { Total current assets } & 670,000 & 565,000 \\\text { Intangible assets } & 50,000 & 60,000 \\\text { Total assets } & 825,000 & 695,000 \\\text { Current liabilities } & 252,500 & 200,000 \\\text { Long-term liabilities } & 77,500 & 75,000 \\\text { Sales } & 1,640,000 & \\\text { Cost of goods sold } & 982,500 & \\\text { Interest expense } & 10,000 & \\\text { Income tax expense } & 77,500 & \\\text { Net income } & 127,500 & \\\text { Cash flow from operations } & 71,000 & \\\text { Cash flow from investing activities } & (6,000) & \\\text { Cash flow from financing activities } & (62,500) & \\\text { Tax rate } & 30 \% &\end{array}$
-The interest coverage for 2014 is:

• A)12.8 times.
• B)13.8 times.
• C)20.5 times.
• D)21.5 times.

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Definitions:

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Share Price

It indicates the current price at which a single share of a company's stock can be bought or sold in the market.

Shareholders

Individuals or entities that own shares in a corporation, representing partial ownership.

Statement of Changes

Often refers to the statement of changes in equity or financial position, showing how equity values change over a period.