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Question - 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?
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