eBook Calculator Times Interest earned The following data were taken from recent annual reports of Caliber Company, which operates a low-fare airline service to more than 50 cities in the United States: Interest expense Current Year $54,000 448,200 Preceding Year $59,000 383,500 Income before income tax a. Determine the times interest earned ratio for the current and preceding years. Round to one decimal place, Current year in this ratio will be Preceding year b. Although Caliber Company had enough earnings to pay interest in the preceding year, the improvement welcomed by the debtholders. Feedback Check My Work Analysts assess the risk that bondholders will not receive their interest payments by computing the number of times interest charges are earned during the year. Because interest payments reduce income tax expense, the ratio is computed using Income before tax. Previous Check My Work