The times-interest-earned (TIE) ratio shows how well a firm can cover its interest payments with operating income. Compare the income statements of Blue Moose Producers and Sweet Dog Manufacturing and calculate the TIE ratio for each firm. Blue Moose Producers Income Statement for the Year Ended on December 31 (Millions of dollars) Net Sales $1,400 Variable costs 560 Fixed costs 490 Total Operating costs 1,050 Operating Income (or EBIT) $350 Less interest 50 Earnings before Taxes (EBT) $300 Less taxes (40%) 120 Net Income $180 Times-Interest-Earned (TIE) Sweet Dog Manufacturing Income Statement For the Year Ended on December 31 Net Sales (Millions of dollars) $1,200 300 540 Variable costs Fixed costs Total Operating costs 840 Operating Income (or EBIT) $360 $ 60 Less interest $300 Earnings before Taxes (EBT) Less taxes (40%) 120 $180 Net Income Times-Interest-Earned (TIE) - Complete the following statement, based on the calculations you have already made. , . Describe the relationship between the TIE ratios of the two companies. The companies have equal TIE ratios. O Blue Moose Producers has a greater TIE ratio than Sweet Dog Manufacturing. O Sweet Dog Manufacturing has a greater TIE ratio than Blue Moose Producers. Which company is in better position to cover its interest payments, and therefore exhibits lower risk, than the other? Both companies are equally positioned to cover their interest payments. Sweet Dog Manufacturing is in a better position to cover its interest payment. O Blue Moose Producers is in a better position to cover its interest payment