Times interest earned Averill Products Inc. reported the

Last updated: 7/29/2022

Times interest earned Averill Products Inc. reported the following on the company's income statement in 20Y8 and 20Y9: Interest expense Income before income tax expense 20Y9 20Y8 $470,000 $410,000 5,311,000 4,141,000 a. Determine the times interest earned ratio for 20Y8 and 20Y9. Round to one decimal place. 20Y9 20Y8 Times Interest Earned 11.3 x 10.1 x 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.