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The following data were taken from recent annual reports of Caliber Company, which operates a low-fare...

The following data were taken from recent annual reports of Caliber Company, which operates a low-fare airline service to more than 50 cities in the United States:

Current Year Preceding Year
Interest expense $75,000 $82,000
Income before income tax 337,500 205,000

a. Determine the times interest earned ratio for the current and preceding years. Round to one decimal place.

Current year
Preceding year

b. Although Caliber Company had enough earnings to pay interest in the preceding year, the   in this ratio will be   by the debtholders.

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