Bundle: Financial & Managerial Accounting, Loose-Leaf Version, 14th + CengageNOWv2, 2 terms Printed Access Card
Bundle: Financial & Managerial Accounting, Loose-Leaf Version, 14th + CengageNOWv2, 2 terms Printed Access Card
14th Edition
ISBN: 9781337591010
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 11, Problem 2ADM

A.

To determine

Times-Interest-Earned ratio: It is the ratio that quantifies a business ability to pay interest expense. It is calculated as shown below:

Times-interest-earned ratio}=Incomebeforeincometax+Interest expenseInterest expense

To Compute: Times-interest-earned ratio for the three years.

B.

To determine

To explain: the interpretation of a negative ratio.

C.

To determine

To explain: whether the trend is improving or deteriorating.

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