eBook Show Me How Times interest earned Averill Products Inc. reported the following on the company's income statement in 20Y8 and 2019: 20Y9 20Y8 Interest expense $440,000 $400,000 Income before income tax expense 5,544,000 4,400,000 a. Determine the times interest earned ratio for 20Y8 and 2019. Round to one decimal place. 20Y9 20YS Times Interest Earned 13.6 12 b. Is the change in the times interest earned ratio favorable or unfavorable? Favorable Feedback Check My Work a. (Income Before Income Tax Expense + Interest Expense)/Interest Expense to obtain the ratio. b. This ratio computes the number of times interest payments could be paid out of current-period earnings. High values are considered favorable. Previous Next Check My Work Email Instructor Save and Exit Submit Assignment for Grading All work saved.
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