the margin of safety provided to creditors
All interest income for the year is added to all of your other gross worldwide income for the year and reported on your 1040 income tax return for the year.
This is a very open ended question that implies one does not understand the purpose of the ratio and I see no advantage to any ratio over another. A ratio simply measures the variables inputted. The Fixed Charge Coverage Ratio ("FCCR") reflects the amount of cash (or EBITDA) left after paying for unfinanced capital expenditures, dividends (or distributions) and cash paid taxes then divided by the "fix charges" or the sum of the past period's cash interest and required payments on long term debt or also know as the current portion long term debt ("CPLTD"). In my opinion to answer the question; the advantage of this ratio over the use of an Uniform Cash Flow Analysis ("UCA") Debt Service Coverage ("DSC") is simply the starting point of EBITDA vs. net income. EBITDA is more commonly used in larger credit facilities as a component of ratios or covenants measurement. Also a very similar ratio is Free Cash Flow ("FCF") divided by Total Debt Service ("TDS") or FCF/TDS.
The number of times interest is calculated for your account Total in your account Interest rate
It is assumed that current liabilities are also ending balance current ratio = current assets/current liabilities current ratio = 1000/400 = 2.5 times
The Receivables turnover ratio is used to measure the number of times on an average; the receivables are collected during a particular timeframe. A good receivables turnover ratio implies that the company is able to efficiently collect its receivables.Formula:RTR = Net Credit Sales / Average Net Receivables
Times Interest Earned = Operating Income/ Interest Expense.
Formula for times interest earned = earning before interest and tax / interest expense Times interest earned = 32000 / 8000 = 4 times
The times interest earned ratio is a financial metric that indicates a company's ability to meet its interest obligations with its operating income. It is calculated by dividing earnings before interest and taxes (EBIT) by interest expense. A higher ratio indicates a company is better able to cover its interest payments.
simple interest = principle (money) times the rate times the time
times interest earned be smaller than fixed charge coverage
Well that is easy there is none and there is no way you can do that
A times interest earned is calculated to determine how well a business could pay off its debts. It is calculated by taking the company's earnings before taxes and interest and dividing it by the interest on bonds payable and other debt.
A metric used to measure a company's ability to meet its debt obligations. It is calculated by taking a company's earnings before interest and taxes (EBIT) and dividing it by the total interest payable on bonds and other contractual debt. It is usually quoted as a ratio and indicates how many times a company can cover its interest charges on a pretax basis. Failing to meet these obligations could force a company into bankruptcy. Also referred to as "interest coverage ratio" and "fixed-charged coverage." Investopedia explains 'Times Interest Earned - TIE' Ensuring interest payments to debt holders and preventing bankruptcy depends mainly on a company's ability to sustain earnings. However, a high ratio can indicate that a company has an undesirable lack of debt or is paying down too much debt with earnings that could be used for other projects. The rationale is that a company would yield greater returns by investing its earnings into other projects and borrowing at a lower cost of capital than what it is currently paying to meet its debt obligations.
I
No.
The fixed charge coverage ratio measures the firm's ability to meet all fixed obligations rather than interest payments alone, on the assumption that failure to meet any financial obligation will endanger the position of the firm
Type y income before income tax plus interest expense, divided by interest expense our answer here...