Balance sheet and income statement data indicate the following: Company A Company B $1,200,000 $900,000 495,000 130,000 75,000 12,000 50,000 0 21,000 28,000 a. For each company, what is the times interest earned ratio? (Round to one decimal place.) Company A 8 Company B b. Which company gives potential creditors more protection? Bonds payable, 8%, 24-year bonds Income before income tax for year Income tax for year Interest payable Interest receivable

Balance sheet and income statement data indicate the following: Company A Company B $1,200,000 $900,000 495,000 130,000 75,000 12,000 50,000 0 21,000 28,000 a. For each company, what is the times interest earned ratio? (Round to one decimal place.) Company A 8 Company B b. Which company gives potential creditors more protection? Bonds payable, 8%, 24-year bonds Income before income tax for year Income tax for year Interest payable Interest receivable

Century 21 Accounting General Journal

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter17: Financial Statement Analysis

Section17.4: Analyzing Financial Statements Using Financial Ratios

Problem 1WT

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