A company's income before interest expense and income taxes in 2016 and 2017 is $487,500 and $427,000, respectively. Its fixed interest expense was $125,000 for both years. Calculate the company's times interest earned ratio, and comment on its level of risk.

Question

Quizplus · Accepted Answer

The Answer of A company's income before interest expense and income taxes in 2016 and 2017 is $487,500 and $427,000, respectively. Its fixed interest expense was $125,000 for both years. Calculate the company's times interest earned ratio, and comment on its level of risk.

A Company's Income Before Interest Expense and Income Taxes in 2016