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Foundations Of Financial Management
Found in: Page 83
Foundations Of Financial Management

Foundations Of Financial Management

Book edition 16th
Author(s) Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Pages 768 pages
ISBN 9781259277160

Short Answer

A firm has net income before interest and taxes of $193,000 and interest expense of $28,100.

a. What is the times-interest-earned ratio?

Times-interest-earned ratio of the company is 6.87.

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Step by Step Solution

Time interest earned ratio

Times-interest-earned ratio of the company is computed to know the ability of the company to pay the interest cost out of its earning before taxes and interest.

Calculation of Time interest earned ratio

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