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LMN Ltd, a British firm, has a financial covenant with its bank mat interest coverage based on earnings before interest taxes, depreciation, and amortization (EBITDA), must be at least 2.5 for each quarter Shown below are summary financial data.
An expected decline m sales will result In net Income of £ 1. 500.000 The other elements of EBITDA will be similar to the most recently completed Quarter.
Given the above information, what is the ratio for the latest completed quarter and do the forecasted results meet the required covenant?
- A . 1. 3 1. and will not be compliant in the next quarter
B. 2.50. and will not be compliant in the next quartet
C. 2.59. and will be compliant in the next quarter
D. 2.69 and will not be compliant in the next quarter
Suggested Answer: D
Posted : 24/01/2023 5:32 pm