Product Line Inc. has the following data:
2X13 2X12 2X11
Sales (all credit sales) $800 $740 $675
Less: Cost of Goods Sold 525 490 450
Gross Profit $275 $250 $225
Less: Operating Expenses 150 140 125
Operating Income $125 $110 $100
Less: Other Expense: Interest 10 8 5
Income before Tax $115 $102 $ 95
Less: Income Tax Expense 51 46 43
Net Income $ 64 $ 56 $ 52
What is the interest coverage for Product Line Inc. in 2X13? Has the interest coverage improved or not improved since 2X12?
A) 12.5, not improved
B) 6.4, not improved
C) 11.5, improved
D) 12.5, improved
E) 6.4, improved
A
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