Homework Answers
Lost Pigeon TIE Ratio= EBIT/ Interest expenses = 175/50=3.5
Happy turtle TIE ratio =300/60=5
Happy turtle has greater TIE ratio than Lost Pigeon. Therefore Happy turtle is in better position to cover its interest payments and exhibits lower risk
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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...
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1. True or False? The larger the firm's TIE ratio, the less times a firm can...
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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...
When a firm has both interest expenses and lease payments, its times interest earned ratio Select one A. Will be smaller than its fixed charge coverage B. Will be greater than its fixed charge coverage cWill be equal to its fixed charge coverage D. Wis not be able to be determined Southpark Ind bad income before interest and taxes of $30,000, paid $4.000 in interest expense, and had $5,000 in operating lease expenses. What is the firm's fixed charge coverage...
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...
Excel Online Structured Activity: TIE ratio MPI Incorporated has $3 billion in assets, and its tax rate is 35%. Its basic earning power (BEP) ratio is 10%, and its return on assets (ROA) is 4%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Open spreadsheet What is MPI's times-interest-earned (TIE) ratio? Round your answer to two decimal places. Uhao Clipboard Font Allgh А...
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