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Determine the times interest earned ratio

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Reference no: EM133111973

Question - Times interest earned - Averill Products Inc. reported the following on the company's income statement in 20Y8 and 20Y9:

 

20Y9

20Y8

Interest expense

$440,000

$400,000

Income before income tax expense

5,544,000

4,400,000

Required -

a. Determine the times interest earned ratio for 20Y8 and 20Y9.

b. Is the change in the times interest earned ratio favorable or unfavorable?

Reference no: EM133111973

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