Lucas Company has provided the following information:
Cash flow from operating activities,$360,000;
Net income,$306,000;
Interest expense,$30,000;
Interest cash payments,$20,000;
Income tax payments,$240,000;
Income tax expense,$246,000.
What was Lucas' cash coverage ratio?
A)21.0
B)31.8
C)21.2
D)31.0

Question

Lucas Company has provided the following information:
 Cash flow from operating activities,$360,000;
 Net income,$306,000;
 Interest expense,$30,000;
 Interest cash payments,$20,000;
 Income tax payments,$240,000;
 Income tax expense,$246,000.
What was Lucas' cash coverage ratio?
A)21.0
B)31.8
C)21.2
D)31.0

Quizplus · Accepted Answer

Cash coverage ratio (31.0) = [Cash flow from operating activities ($360,000) + Interest payments ($20,000) + Income tax payments ($240,000)] F1F1F1S1?F1F1F10 Interest payments ($20,000)

Lucas Company Has Provided the Following Information