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22nd Edition
ISBN: 9780077632878
Author: Wild
Publisher: MCG
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Chapter 11, Problem 2BTN
To determine

Times Interest Earned:

The ratio which measures a company’s ability to pay its obligation is called a times interest earned. It is computed by dividing the net income before interest and taxes by the interest expense of the company.

To determine:

1. Computation of times interest earned for the three years’ data for each company.

2. Determine which company appears stronger in its ability to pay interest obligations if income should decline.

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Chapter 11 Solutions

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