Question

Connect Homework - Chapter 9 Saved Help Save & Exit Submit 5 Required information Problem 9-5A Computing and analyzing times interest earned LO A1 The following information applies to the questions displayed below] Part 1 of 2 Shown here are condensed income statements for two different companies (assume no income taxes) Miller Company 1 Sales $1,150,000 920,000 230,000 76,000 $ 154,000 points Variable expenses (80%) Income before interest Interest expense (fixed) eBook Net income Print References Weaver Company Sales $1,150,000 Variable expenses (60%) 690,000 460,000 306,000 Income before interest Interest expense (fixed) $ 154,000 Net income Problem 9-5A Part 1
I need help with the solution and explanation in the whole question Please and Thank you.

Answer 1

Answer- Times interest earned ratio= Income before Interest & Taxes(EBIT)/Interest expenses

Miller Company = ($154000+$76000)/$76000

= $230000/$76000

= 3.02 times

Weaver Company = ($154000+$306000)/$306000

= $460000/$306000

= 1.50 times