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Problem - Number of times interest charges are earned
Katula Company reported the following on the company's income statement in 2012 and 2011:
2012
2011
Interest expense
$250,000
$275,000
Income before income tax expense
3,100,000
4,400,000
Required -
a. Determine the number of times interest charges were earned for 2011 and 2012. Round to one decimal place.
b. Is the number of times interest charges are earned improving or declining?
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