Ask Question
8 March, 14:29

Ajax Corp's sales last year were $400,000, its operating costs were $362,500, and its interest charges were $12,500. What was the firm's times-interest-earned (TIE) ratio

+1
Answers (1)
  1. 8 March, 16:42
    0
    3 times

    Explanation:

    Times Interest earned is a financial ratio that shows how many times an entity's net income or earnings before interest and taxes can be used to settle the company's interest expense.

    It is given as the ratio of earnings before interest and tax to interest expense.

    Earnings before interest and taxes is the difference of sales and operating costs.

    = $400,000 - $362,500

    = $37,500

    Hence, the firm's times-interest-earned (TIE) ratio

    = $37,500/$12,500

    = 3
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Ajax Corp's sales last year were $400,000, its operating costs were $362,500, and its interest charges were $12,500. What was the firm's ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers