Allston-Brighton Corp

question 92

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,Interest coverage ratio,and EBITDA coverage ratio.

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Definitions:

Warranty

A guarantee, provided by a seller or manufacturer, assuring the quality, performance, or lifespan of a product, often implying repair or replacement if specifications are not met.

Tender Of Performance

An unsuccessful (because it is rejected or prevented by the other party) attempt by one of the parties to a contract to perform its obligations under the contract.

Breach Of Contract

The violation of any agreed-upon terms or conditions in a binding contract, which can lead to legal consequences for the party in breach.

Designated Contract

A specific agreement set apart for a unique purpose or recognized formally in a particular context.