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Current Year Prior Year Interest expense $5,000,000 $5,000,000 Income before income tax 3,500,000 6,000,000

Current Year Prior Year Interest expense $5,000,000 $5,000,000 Income before income tax 3,500,000 6,000,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Iacouva Company reported the following on the company’s income statement for two recent years:

Please see  the attachment for details:

a. Determine the times interest earned ratio for the current year and the prior year. Round to one decimal place.
b. What conclusions can you draw?

 

Current Year Prior Year Interest expense $5,000,000 $5,000,000 Income before income tax 3,500,000 6,000,000
Transcribed Image Text:Current Year Prior Year Interest expense $5,000,000 $5,000,000 Income before income tax 3,500,000 6,000,000
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