The times-interest-earned ratio is 6.25 for Retailer A and 5.1 for Retailer B. This indicates that...
The times-interest-earned ratio is 6.25 for Retailer A and 5.1 for Retailer B. This indicates that Retailer B will find it easier to pay interest expense. true or false
Homework Answers
The Formula for Times Interest Earned Ratio = Earnings Before Interest & Taxes/ Interest
This ratio shows the company ability to service its debt obligations. Higher the ratio , Higher the ability to pay its interest cost.
In the Retailer A has 6.25 which is higher than Retailer B. So its false that Retailer B will find it easier to pay interest expense.
So answer is FALSE
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