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:

	Current Year		Preceding Year
Interest expense	$66,000		$73,000
Income before income tax	343,200		262,800

a. Determine the times interest earned ratio for the current and preceding years. Round to one decimal place.

Current year
Preceding year

b. Although Caliber Company had enough earnings to pay interest in the preceding year, the in this ratio will be by the debtholders.