In the past year, TVG had revenues of $2.93 million, cost of goods sold of $2.43 million, and depreciation expense of $102,200. The firm has a single issue of debt outstanding with book value of $1.17 million on which it pays an interest rate of 10%. What is the firm’s times interest earned ratio? (Do not round intermediate
In the past year, TVG had revenues of $2.93 million, cost of goods sold of $2.43 million, and depreciation expense of $102,200. The firm has a single issue of debt outstanding with book value of $1.17 million on which it pays an interest rate of 10%. What is the firm’s times interest earned ratio? (Do not round intermediate
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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In the past year, TVG had revenues of $2.93 million, cost of goods sold of $2.43 million, and
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Step 1
Time interest earned ratio This give the ability of firm to pay interest on debt regularly.
Time interest earned ratio can be calculated by dividing operating income to interest expenses of firm.
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