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Calculate the Current Ratio and the EBIT Interest Coverage

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    Assignment ID: FG133056738

    Question – Mary has calculated the cost of equity for a company to be 7.66% using a government bond rate of 2.67% and market return rate of 9.07%. Mary has calculated the cost of equity for a company to be 7.66% using a government bond rate of 2.67% and market return rate of 9.07%. Calculate the Current Ratio and the EBIT Interest Coverage using the following numbers from the company’s annual report for year ending 30June 2017, and interpret what these two ratios imply in terms of the company’s solvency and efficiency: EBIT $421.7m; NPAT (net profit after tax) $264.4m; Total Current Assets $427.6m; Total Current Liabilities $589.3m.

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