For the fiscal year ended December 31, 2019, Austin Enterprises had Sales of $9,067,000; EBIT of $2,197,000; Net Income Before Tax of $1,906,000; Net Income After Tax of $1,258,000; and Interest Expense of $291,000

Finance Dec 26, 2020

For the fiscal year ended December 31, 2019, Austin Enterprises had Sales of $9,067,000; EBIT of $2,197,000; Net Income Before Tax of $1,906,000; Net Income After Tax of $1,258,000; and Interest Expense of $291,000. What was the Times-Interest-Earned ratio for 2019?

Expert Solution

Times-Interest-Earned ratio=EBIT/interest expense

=2,197,000/291,000

which is equal to

=7.55(Approx)

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