In the Past Year,TVG Had Revenues of $3 Million,cost of Goods

question 6

Multiple Choice

In the past year,TVG had revenues of $3 million,cost of goods sold of $2.5 million,and depreciation expense of $200,000.The firm has a single issue of debt outstanding with a face value of $1million,market value of $.92 million,and a coupon rate of 8%.What is the firm's times interest earned ratio?

• A) 3.75
• B) 2.98
• C) 2.80
• D) 3.40

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Definitions:

Accounts Payable

The amount a company owes to suppliers for items or services purchased on credit.

Liabilities

Obligations in terms of finances that an organization must fulfill to external parties, involving the exchange of economic advantages like funds, goods, or assistance over time.

Accounts Receivable

Money owed to a company by its customers for goods or services provided on credit.

Capital

Represents the amount of funds provided by owners or investors to support business operations.