Allston-Brighton Corp

question 41

Essay

Allston-Brighton Corp. has total assets of $10 million, total liabilities of $4 million, of which $1 million are non-interest bearing. Interest expense was $180,000. Earnings before interest and taxes were $2.5 million. Depreciation was $1.5 million. Compute the following ratios: Debt ratio, Interest-bearing debt ratio, Times interest earned ratio, and EBITDA coverage ratio.

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Definitions:

Unions

Organizations formed by workers from related sectors to negotiate collectively with employers over wages, benefits, and working conditions.

Efficiency Wages

Above-equilibrium wages paid by firms to increase worker productivity.

Government-Run Employment Agencies

Public institutions designed to help individuals find jobs and employers to find suitable candidates, often providing additional services like career counseling and training.

Public Training Programs

Educational or vocational training initiatives funded or provided by the government to improve workforce skills.