Homework Answers
Answer : Increase, then risk decreases
Explanation : Times interest earned ratio = Earnings before interest and taxes / Interest
This ratio shows how much times the company's earnings before interest and taxes are of its interest. If it this ratio increase then risk decreases and if this ratio decreases then risk increases.
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If the times interest earned ratio: Multiple Choice Increases, then risk increases. Increases, then risk decreases....
please help 1. A times interest earned ratio of 1.20 to 1 means: a. that the...
please help
1. A times interest earned ratio of 1.20 to 1 means: a. that the firm will default on its interest payment. b. that net income is less than the interest expense c. that the cash flow is less than the net income. d. that the cash flow exceeds the net income e. that net income is greater than the interest expense. 2. The debt ratio indicates: a. the ability of the firm to pay its current obligations. b....
10. Times-interest-earned (TIE) ratio The times-interest-earned (TIE) ratio shows how well a firm can cover its...
10. Times-interest-earned (TIE) ratio The times-interest-earned (TIE) ratio shows how well a firm can cover its interest payments with operating income. Compare the income statements of Lost Pigeon Aviation and Happy Turtle Transporters Inc. and calculate the TIE ratio for each firm. Lost Pigeon Aviation Income Statement For the Year Ended on December 31 Net Sales (Millions of dollars) 700 280 Variable costs Fixed costs 245 $525.00 Total Operating costs 175 Operating Income (or EBIT) Less interest 50 125 Earnings...
10. Times-interest-earned (TIE) ratio The times-interest-earned (TIE) ratio shows how well a firm can cover its...
10. Times-interest-earned (TIE) ratio The times-interest-earned (TIE) ratio shows how well a firm can cover its interest payments with operating income. Compare the income statements of Lost Pigeon Aviation and Happy Turtle Transporters Inc. and calculate the TIE ratio for each firm. Lost Pigeon Aviation Income Statement For the Year Ended on December 31 (Millions of dollars) Net Sales 700 Variable costs 280 Fixed costs 245 Total Operating Costs $525.00 175 Operating Income (or EBIT) Less interest 50 Earnings before...
question. 1) 1) Tf a firm's cash coverage ratio is greater than its times interest earned...
question. 1) 1) Tf a firm's cash coverage ratio is greater than its times interest earned ratio, then the: A) firm has a high degree of liquidity. B) firm has no lease obligations. C) firm's assets are not fully depreciated. D) firm has very little long-term debt.
E10-10 Calculating and Interpreting the Debt-to-Assets Ratio and Times Interest Earned Ratio (LO 10-5) At May 31, 2...
E10-10 Calculating and Interpreting the Debt-to-Assets Ratio and Times Interest Earned Ratio (LO 10-5) At May 31, 2016, FedEx Corporation reported the following amounts (in millions) in its financial statements; 2015 $12,100 7,018 Total Assets Total Liabilities Interest Expense Income Tax Expense Net Income 2016 $12,960 7,776 270 300 1,050 Required: 1.Compute the debt-to-assets ratio and times interest earned ratio for 2016 and 2015. (Round your answers to 2 decimal places.) 2016 2015 Debt-to-Assets Times Interest Eamed Ratio 2-a. Creditors...
14. How to report contingent liabilities. 15. The formula for the times-interest-earned ratio and what is...
14. How to report contingent liabilities. 15. The formula for the times-interest-earned ratio and what is a good one 16. Who pays which taxes (employee, employer, both) 17. Calculate the Current Portion of a Long-Term Note Payable 18. Definitions related to Bonds Payable-principal amount, maturity date, etc 19. Calculate the Cash proceeds for bonds when issued at par, discount, or premium 20. Calculate Bond carrying amount 21. Calculate effect on Income Statement when retiring bonds. 22. Determine if liabilities are...
The times-interest-earned (TIE) ratio shows how well a firm can cover its interest payments with operating...
The times-interest-earned (TIE) ratio shows how well a firm can cover its interest payments with operating income. Compare the income statements of Lost Pigeon Aviation and Purple Panda Importers and calculate the TIE ratio for each firm. Lost Pigeon Aviation Income Statement For the Year Ended on December 31 (Millions of dollars) Net Sales 1400 Variable costs 560 Fixed costs 490 Total Operating Costs $1,050.00 Operating Income (or EBIT) 350 Less interest 50 Earnings before Taxes (EBT) 300 Less taxes...
PLEASE NOTE: There is a typo in your book regarding the Times-Interest-Earned Ratio. The correct formula...
PLEASE NOTE: There is a typo in your book regarding the Times-Interest-Earned Ratio. The correct formula is EBIT/Interest Expense. Complete a debt analysis for this company. * Calculate AND interpret the debt ratio, the times-interest-earned ratio, the fixed-payment coverage ratio * Make a credit decision. Based on the loan request and on your analysis, would you approve or deny the loan request? As always, show ALL of your work. P3-18 Debt analysis Springfield Bank is evaluating Creek Enterprises, which has...
If the Federal funds rate Multiple Choice increases, the prime interest rate will increase. increases, the...
If the Federal funds rate Multiple Choice increases, the prime interest rate will increase. increases, the prime interest rate will decrease. decreases, the prime interest rate will not change. decreases, the prime interest rate will increase.
An example of a covenant related to a loan agreement is: Multiple Choice Minimum times interest...
An example of a covenant related to a loan agreement is: Multiple Choice Minimum times interest -earned Minimum debt to equity Minimum days in Accounts payable Maximum EBITDA margin
please help
1. A times interest earned ratio of 1.20 to 1 means: a. that the firm will default on its interest payment. b. that net income is less than the interest expense c. that the cash flow is less than the net income. d. that the cash flow exceeds the net income e. that net income is greater than the interest expense. 2. The debt ratio indicates: a. the ability of the firm to pay its current obligations. b....
10. Times-interest-earned (TIE) ratio The times-interest-earned (TIE) ratio shows how well a firm can cover its interest payments with operating income. Compare the income statements of Lost Pigeon Aviation and Happy Turtle Transporters Inc. and calculate the TIE ratio for each firm. Lost Pigeon Aviation Income Statement For the Year Ended on December 31 Net Sales (Millions of dollars) 700 280 Variable costs Fixed costs 245 $525.00 Total Operating costs 175 Operating Income (or EBIT) Less interest 50 125 Earnings...
10. Times-interest-earned (TIE) ratio The times-interest-earned (TIE) ratio shows how well a firm can cover its interest payments with operating income. Compare the income statements of Lost Pigeon Aviation and Happy Turtle Transporters Inc. and calculate the TIE ratio for each firm. Lost Pigeon Aviation Income Statement For the Year Ended on December 31 (Millions of dollars) Net Sales 700 Variable costs 280 Fixed costs 245 Total Operating Costs $525.00 175 Operating Income (or EBIT) Less interest 50 Earnings before...
question. 1) 1) Tf a firm's cash coverage ratio is greater than its times interest earned ratio, then the: A) firm has a high degree of liquidity. B) firm has no lease obligations. C) firm's assets are not fully depreciated. D) firm has very little long-term debt.
E10-10 Calculating and Interpreting the Debt-to-Assets Ratio and Times Interest Earned Ratio (LO 10-5) At May 31, 2016, FedEx Corporation reported the following amounts (in millions) in its financial statements; 2015 $12,100 7,018 Total Assets Total Liabilities Interest Expense Income Tax Expense Net Income 2016 $12,960 7,776 270 300 1,050 Required: 1.Compute the debt-to-assets ratio and times interest earned ratio for 2016 and 2015. (Round your answers to 2 decimal places.) 2016 2015 Debt-to-Assets Times Interest Eamed Ratio 2-a. Creditors...
14. How to report contingent liabilities. 15. The formula for the times-interest-earned ratio and what is a good one 16. Who pays which taxes (employee, employer, both) 17. Calculate the Current Portion of a Long-Term Note Payable 18. Definitions related to Bonds Payable-principal amount, maturity date, etc 19. Calculate the Cash proceeds for bonds when issued at par, discount, or premium 20. Calculate Bond carrying amount 21. Calculate effect on Income Statement when retiring bonds. 22. Determine if liabilities are...
PLEASE NOTE: There is a typo in your book regarding the Times-Interest-Earned Ratio. The correct formula is EBIT/Interest Expense. Complete a debt analysis for this company. * Calculate AND interpret the debt ratio, the times-interest-earned ratio, the fixed-payment coverage ratio * Make a credit decision. Based on the loan request and on your analysis, would you approve or deny the loan request? As always, show ALL of your work. P3-18 Debt analysis Springfield Bank is evaluating Creek Enterprises, which has...
An example of a covenant related to a loan agreement is: Multiple Choice Minimum times interest -earned Minimum debt to equity Minimum days in Accounts payable Maximum EBITDA margin
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