What does the interest earned versus the fixed charge coverage indicate about each company? Why is the times interest earned materially higher than the fixed charge coverage?

Q: What do the Retained earnings represent?

A: Financial Statement:   They are annual reports of an organization summarizing the financial…

Q: What is meant by the concept of “potential savings (profits)”?

A: Profit is the total revenues less all costs and expenses. In other words, profit is the net earnings…

Q: What is marginal rate (for debt)?

A: Marginal rate of debt is the rate of interest expected by the investors on their debt instruments…

Q: What is the Times-interest·earned ratio?

A: It is important to analyze whether a company has ability to pay off its debts. Means, it is…

Q: What is the meaning of Installment Sales?

A: Installment sale: It is one of a few potential income acknowledgments approaches under the Generally…

Q: Which of the following methods consider the time value of money? A. payback and accounting rate of…

A: Time Value of Money The time value of money is the concept that money you have now is worth more…

Q: the best way to calculate the appropriate Discount Rate

A: In the valuation of the companies there is need of discount rate to calculate net present value of…

Q: When is the Book Value per Share used?

A: Book Value Per Share:   Book Value per share is a simple calculation of total shareholders’ equity,…

Q: What does the Times Interest Earn ratio state? Provide an example

A: Times interest earned ratio tells about the ability of the company to pay it's obligations which is…

Q: When is the Times-Interest-Earned Ratio?

A: The TIE is a calculation of a firm's ability to reach its debt liability based on its current…

Q: What is the difference between gross pay and net pay?

A: Gross pay: The total amount such as salary, wages, commissions, overtime, and bonus paid by the…

Q: Increases to owner's equity may be from what?

A: Owners' Equity: This is the amount the investors have invested in business to get the ownership. The…

Q: What is the current market view on GBP/USD? (Will it appreciate and which depreciate? and why?)

A: The exchange rate are dependent on the the market factors and other factors which are point of…

Q: Why will the fixed-charge-coverage ratio always be equal to or less than times interest earned?

A: The objective of the question is to understand why the fixed-charge-coverage ratio is always equal…

Q: How do you calculate the breakeven point in revenues?

A: Break-even point is the level at which profit is zero; that is, at the Break-even level, expenses…

Q: What does it mean to have a Price- earnings ratio that is higher or lower than the norm?

A: Price-earnings ratio (P/E ratio) = price per share/earnings per share

Q: What is another way of saying "Interest earned on interest"?

A: "Interest earned on interest" means the interest earned on the interest amount which was earned on…