Times interest earnedAverill Products Inc. reported the following on the company's income statementin 20Y8 and...
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Times interest earnedAverill Products Inc. reported the following on the company's income statementin 20Y8 and 20Y9:InterestexpenseIncome beforeincome taxexpense20Y920Y8$470,000 $410,0005,311,000 4,141,000a. Determine the times interest earned ratio for 20Y8 and 20Y9. Round to onedecimal place.20Y920Y8Times Interest Earned 11.3 x10.1 xb. Is the change in the times interest earned ratio favorable or unfavorable?FavorableFeedbackCheck My Worka. (Income Before Income Tax Expense + Interest Expense)/Interest Expense toobtain the ratio.b. This ratio computes the number of times interest payments could be paid out ofcurrent-period earnings. High values are considered favorable.
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