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A company reports the following: Income before income tax $4,000,000 Interest expense 400,000 Determine the A ratio that measures creditor margin of safety for interest
A company reports the following:
Income before income tax | $4,000,000 |
Interest expense | 400,000 |
Determine the A ratio that measures creditor margin of safety for interest payments, calculated as income before income tax + interest expense divided by interest expense.number of times interest charges are earned.
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