Here are some data for five companies in the same industry: a. Calculate a measu
ID: 2759544 • Letter: H
Question
Here are some data for five companies in the same industry:
a. Calculate a measure of times-interest-earned for the industry. (Round your answer to 2 decimal places.)
Times-interest-earned:
b. Calculate a measure of times-interest-earned for each company. (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)
c. Calculate the average times-interest-earned ratio. (Round your answer to 2 decimal places.)
A B C D E EBIT 14.56 40.56 131.56 -5.46 128.96 Interest Expense 5.60 15.60 50.60 2.60 1.60Explanation / Answer
Times interest earned (TIE) is a metric used to measure a company's ability to meet its debt obligations. It is calculated by taking a company'searnings before interest and taxes (EBIT) and dividing it by the total interest payable on bonds and other contractual debt
A. (14.56+40.56+131.56-5.46+128.96)/(5.6+15.6+50.6+2.6+1.6)
=310.18/76=4.08
B.
a.14.56/5.6 =2.6
b 2.6
c 2.6
d -2.1
e 80.6
C.Average value is 17.26 average of above 5 values
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