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Determine the number of times interest charges were earned

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Problem - Number of times interest charges are earned - The following data were taken from recent annual reports of Southwest Airlines, which operates a low-fare airline service to over 50 cities in the United States.

 

Current Year

Preceding Year

Interest expense

$105,000,000

$69,000,000

Income before income tax

278,000,000

1,058,000

Required -

a. Determine the number of times interest charges were earned for the current and preceding years. Round to one decimal place.

b. What conclusions can you draw?

Reference no: EM132878973

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