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 } = Income before income tax + Interest expense Interest expense To calculate : Times-interest-earned ratio for the current year 2016 and the prior year 2015.

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Answer 1

Question

Chapter 14, Problem 14.15EX

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}=Income before income tax+Interest expenseInterest expense

To calculate: Times-interest-earned ratio for the current year 2016 and the prior year 2015.

b)

To determine

To compare: Times-interest-earned ratio of the current year 2016 from the prior year 2015.

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Balance Sheet at End of Year- figures in millions Assets 2015 2016 Liability & Shareholder Equity 2015 2016 Current Assets $90 $140 $50 $60 Net fixes Asst. $800 $900 $600 $750 ___________________________________________________________ Income Statement 2016 Revenue $1,950 Cost Goods $1,030 Depreciation $350 Interest expense $240 What are the taxes paid in 2016? Assume the firm pay taxes equal to 35% of taxable income. What is cash provided by operations during 2016? Net fixed assets increased form 800 to 900 during 2016, what was the gross investment in fixed assets in 2016?

How do I calculate based on the Income Statement and Balance sheet below: Times Interest Earned =Earnings before interest & taxes/interest expense, gross? (in thousands) (in thousands) 2015 2014 Sales (net) 30,500 Cash 400 500 Interest income 500 Short-term investments 300 200 Total Revenue 31,000 Accounts receivable (net) 3,200 2,900 Cost and expenses Inventory 6,000 5,400 Cost of goods sold 17,600 Total current assets 9,900 9,000 Selling and general administrative expenses 3,550 Property, plant, and equipment 7,100 7,000 Depreciation and amortization expenses 1,890 Total assets 17,000 16,000 Interest Expense 900 Accounts payable 3,700 3,400 Total costs and expenses 23,940 Income taxes payable 900 800 Income before taxes 7,060 Accrued expenses 1,700 1,400 Income taxes -2,800 Total current liabilities 6,300 5,600 Net income 4,260 Long-term debt 2,000 1,800 Total liabilities 8,300 7,400 Common…

The following data come from the financial records of Rundle Corporation for 2018: Sales $ 845,000 Interest expense 5,800 Income tax expense 28,500 Net income 23,000 Required How many times was interest earned in 2018?

Answer 2

Question

Chapter 14, Problem 14.15EX

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}=Income before income tax+Interest expenseInterest expense

To calculate: Times-interest-earned ratio for the current year 2016 and the prior year 2015.

b)

To determine

To compare: Times-interest-earned ratio of the current year 2016 from the prior year 2015.

Expert Solution & Answer

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Answer 3

Question

Chapter 14, Problem 14.15EX

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}=Income before income tax+Interest expenseInterest expense

To calculate: Times-interest-earned ratio for the current year 2016 and the prior year 2015.

b)

To determine

To compare: Times-interest-earned ratio of the current year 2016 from the prior year 2015.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

Question

Chapter 14, Problem 14.15EX

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}=Income before income tax+Interest expenseInterest expense

To calculate: Times-interest-earned ratio for the current year 2016 and the prior year 2015.

b)

To determine

To compare: Times-interest-earned ratio of the current year 2016 from the prior year 2015.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 5

Chapter 14, Problem 14.15EX

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}=Income before income tax+Interest expenseInterest expense

To calculate: Times-interest-earned ratio for the current year 2016 and the prior year 2015.

b)

To determine

To compare: Times-interest-earned ratio of the current year 2016 from the prior year 2015.

Answer 6

Chapter 14, Problem 14.15EX

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}=Income before income tax+Interest expenseInterest expense

To calculate: Times-interest-earned ratio for the current year 2016 and the prior year 2015.

Answer 7

Chapter 14, Problem 14.15EX

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}=Income before income tax+Interest expenseInterest expense

To calculate: Times-interest-earned ratio for the current year 2016 and the prior year 2015.

Answer 8

b)

To determine

To compare: Times-interest-earned ratio of the current year 2016 from the prior year 2015.

Answer 9

b)

To determine

To compare: Times-interest-earned ratio of the current year 2016 from the prior year 2015.

Answer 10

Expert Solution & Answer

Answer 11

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Answer 12

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Answer 13

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