Question
(Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) 2016 2017 EBIT $291,885 $186,993 Interest
(Click on the icon here
in order to copy the contents of the data table below into a spreadsheet.)
2016 | 2017 | |||
EBIT | $291,885 | $186,993 | ||
Interest expense | $46,706 | $69,869 | ||
Taxes | $53,939 | $25,767 | ||
Net profit | $191,240 | $91,357 |
The following data have been gathered from the financial statements of General Nutrition Centers: LOADING... . Calculate the times interest earned ratios for 2016 and 2017. Is the company more or less able to meet its interest payments in 2017 when measured this way?The firm's times interest earned ratio for 2016 is enter your response here. (Round to two decimal places.)The firm's times interest earned ratio for 2017 is enter your response here. (Round to two decimal places.)Is the company more or less able to meet its interest payments in 2017 when measured this way?(Select the best choice below.)
A.The company is less able to meet its interest payments in 2017 because interest coverage fell.
B.The company is more able to meet its interest payments in 2017 because interest coverage rose.
C.The company is more able to meet its interest payments in 2017 because interest coverage fell.
D.The company is less able to meet its interest payments in 2017 because interest coverage rose. |
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