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Times Interest Earned =
Operating Income/ Interest Expense.
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∙ 15y ago
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What advantage does the fixed charge coverage ratio offer over simply using times interest earned?
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
The number of times interest charges are earned is computed as?
Type y income before income tax plus interest expense, divided by interest expense our answer here...
Assuming a 30-day period in November calculate November's interest using the average daily balance method?
Use this simple formula: I=Average daily balance times the interest rate, divided by 366 times 30 days in November.
A loan at 6 percent interest over 5 years What is the total output?
If the interest is simple interest, then the value at the end of 5 years is 1.3 times the initial investment. If the interest is compounded annually, then the value at the end of 5 years is 1.3382 times the initial investment. If the interest is compounded monthly, then the value at the end of 5 years is 1.3489 times the initial investment.
How is savings bank rate calculated?
There was a change recently in India about the calculation of savings account interest rate.Earlier Method: The minimum balance maintained in the account between the 10th and the last day of the month (say 30th or 31st) will be taken for the interest computationNew Method: The balance at the end of every day will be taken into account for interest computation.Let us check this with a real time example:Mr. X get his salary of Rs. 50,000/- on the 1st - Balance in Account Rs. 50,000/-Withdraws Rs. 20,000/- for family expenditure on 8th - Balance in Acc Rs. 30,000/-EMI on Personal loan Rs. 15,000/- deducted on 15th - Balance in Acc Rs. 15,000/-Withdrawal of Rs. 10,000/- to meet sudden expenses on 25th - Balance in Acc Rs. 5,000/-Now let us compute the Interest earned in the account by both ways.As per the Earlier Method:Amount considered for interest computation = Rs. 5,000/-Interest earned for the month = Rs. 14.58/-As per the New Method:Balance considered for Interest for 7 days = Rs. 50,000/-Balance considered for Interest for the next 7 days = Rs. 30,000/-Balance considered for Interest for the next 10 days = Rs. 15,000/-Balance considered for the last 6 days = Rs. 5,000/-Total No. of days in the month = 30 daysInterest for first 7 days (Rs. 50,000/-) = Rs. 34.02/-Interest for next 7 days (Rs. 30,000/-) = Rs. 20.41/-Interest for next 10 days (Rs. 15,000/-) = Rs. 14.58/-Interest for the last 6 days (Rs. 5,000/-) = Rs. 2.92/-Total Interest Earned for the month = Rs. 71.93/-This is nearly 5 times as that of the interest earned by the old method.
A company's fixed interest expense is 8000 its income before interest expense and income taxes is 32000 Its net income is 9600 The company's times interest earned ratio is?
Formula for times interest earned = earning before interest and tax / interest expense Times interest earned = 32000 / 8000 = 4 times
What does a times interest earned ratio indicate?
the margin of safety provided to creditors
What is times burden covered ratio?
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.
How do you calculate simple interest earned?
simple interest = principle (money) times the rate times the time
If a firm has both interest expense and lease payments would times interest earned be smaller than fixed charge coverage?
times interest earned be smaller than fixed charge coverage
How do you calculate times interest earned if there was no interest expense?
Well that is easy there is none and there is no way you can do that
How does one calculate times interest earned?
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.
If the principal is 350 and the interest rate is 3 percent what is the simple interest earned in one year simple interest P and times r and times t?
I
Is interest earned calculated by multiplying the principle times the opportunity cost?
No.
What advantage does the fixed charge coverage ratio offer over simply using times interest earned?
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
The number of times interest charges are earned is computed as?
Type y income before income tax plus interest expense, divided by interest expense our answer here...
Which is bigger compounded interest quarterly or compound interest monthly?
With the same rate of interest, monthly compounding is more than 3 times as large.The ratio of the logarithms of capital+interest is 3.
