2-3 Wolken Corporation has $500000 of debt outstanding, and it pays an interest rate of 10 percent annually. Wolken's annual sales are $2 million, its average tax rate is 20 percent, and its net profit margin is 5 percent. If the company does not maintain a TIE ratio of at least 5, its bank will refuse to renew ...the loan what is wolkens tie ratio
Not enough information. The interest earned depends on the capital (which is the only datum provided), on the interest rate, on the time (for example, how long you leave interest in your bank), and on whether simple or compound interest was agreed.
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.
To record interest earned, you typically make a journal entry that credits an interest income account and debits an asset account, such as cash or accounts receivable, depending on whether the interest has been received or is accrued. For example, if you earned $100 in interest, you would debit the cash account and credit the interest income account. This ensures that your financial statements accurately reflect the income earned during the accounting period.
To substitute values into the simple interest formula, use the formula (I = P \times r \times t), where (I) is the interest, (P) is the principal amount, (r) is the annual interest rate (in decimal form), and (t) is the time in years. For example, if (P = 1000), (r = 0.05), and (t = 3), you would substitute these values in to get (I = 1000 \times 0.05 \times 3). This simplifies to (I = 150). Thus, the interest earned over three years would be $150.
Compound Interest
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
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
Yes, a high times interest earned ratio is considered good because it indicates that a company is generating enough earnings to cover its interest expenses.
Not enough information. The interest earned depends on the capital (which is the only datum provided), on the interest rate, on the time (for example, how long you leave interest in your bank), and on whether simple or compound interest was agreed.
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.
I
A higher times interest earned ratio is better for a company's financial health. It indicates that the company is more capable of meeting its interest obligations with its earnings.
A high times interest earned ratio indicates that a company is able to easily cover its interest expenses with its operating income. This suggests that the company is financially stable and less risky for investors.
No.