Answered: Current Year Prior Year $ 13,500,000 $…

Current Year Prior Year $ 13,500,000 $ 16,000,000 Interest expense Income before income tax expense 432,000,000 310,500,000

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter17: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 1BCRQ

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Question

Loomis, Inc. reported the following on the company’s income statement in two recent years:

Please see the image for details:

a. Determine the times interest earned ratio for the current year and the prior year. Round to one decimal place.
b. Is this ratio improving or declining?

Current Year
Prior Year
$ 13,500,000
$ 16,000,000
Interest expense
Income before income tax expense
432,000,000
310,500,000

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