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Zoom sales last year were $435,000, its operating costs including Depreciation were $362,500, and its interest charges were $12,500. What was the firm's times-interest-earned (TIE) ratio?

Respuesta :

ayden9574

Answer:

374,000

Explanation:

because 362,500 plus 4,000 equals 364,500 add the last 10,000 and you have 374,500 add the 500 and now you have 375k

chilljain33

The firm's Times-interest earned ratio will be 5.8 times. This can be obtained from the formula of TIE ratio after necessary calculation involving earnings before interest, taxes, depreciation and appreciation.

In the example given above all the value are calculated and found the answers as EBITDA comes down to $72500. Whereas the interest charges are given- $12500.

The formula to calculate the TIE ratio of zoom is as follows.

[tex]Times\ Interest\ Earned=\dfrac{\rm{EBITDA}}{\rm{interest\ charges}}[/tex]

  • By putting the values in the above formula we get values as 72500 / 12500

[tex]Times\ interest\ earned=\dfrac{\rm{435000-362500}}{\rm{12500}}\\\\\\Times\ Interest\ earned = \dfrac{72500}{12500}[/tex]

Hence the times interest earned comes down to 5.8 times.

The correct solution will be 5.8 times the interest has been earned above the charges actually born.

To know more about ratios, refer to the links below

https://brainly.com/question/1504221

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