Question

Calculate Delta Airlines times-interest-earned ratio for the year end for 2016 and What does this tell you about the company?

Answer #1

times-interest-earned ratio formula=Earnings before interest and taxes (EBIT) or operating income/interest expense

Delta Airlines times-interest-earned ratio for the year end for 2016=6952/388=17.92 times is the answer

the above data has been taken be 2016 annual report , the company website link: http://d18rn0p25nwr6d.cloudfront.net/CIK-0000027904/96460059-638a-4067-b1a7-e173fdf49a38.pdf

The times-interest-earned ratio for the year end for 2016 of 17.92 times tells us that the company has high cash flow generating capability to meet periodic interest expenses payments , so there is no risk related to interest payments in the coming years.

the above are the answers.

Calculate delta airline's times-interest-earned ratio for the
year end. What does this tell you about delta airlines? (reference
required to support the answer)

Compute Delta airline's debt to equity ratio at year end. How
does it compare to the industry? What does this tell you about the
company? (reference required to support the answer)

What is one difference between the current ratio and the times
interest earned ratio?

1) What is the measure of indebtedness?
Quick ratio
Current ratio
Times interest earned
Debt ratio
2) Do you want this measure higher or lower?
Higher
Lower

The following information was available for the year ended
December 31, 2016:
Earnings before
interest and taxes (operating income)
$
69,000
Interest expense
13,000
Income tax expense
18,000
Net income
38,000
Total assets at year-end
230,000
Total liabilities at
year-end
132,000
Required:
a. Calculate the debt ratio at December 31,
2016. (Round your answer to 1 decimal place.)
b. Calculate the debt/equity ratio at December 31,
2016. (Round your answer to 2 decimal places.)
c. Calculate the times interest earned...

Times-Interest-Earned Ratio
The Morris Corporation has $400,000 of debt outstanding, and it
pays an interest rate of 9% annually. Morris's annual sales are
$1.6 million, its average tax rate is 40%, and its net profit
margin on sales is 3%. If the company does not maintain a TIE ratio
of at least 5 to 1, its bank will refuse to renew the loan and
bankruptcy will result. What is Morris's TIE ratio? Do not round
intermediate calculations. Round your answer...

Ratio of Liabilities to Stockholders' Equity and Times Interest
Earned
The following data were taken from the financial statements of
Hunter Inc. for December 31 of two recent years:
Current Year
Previous Year
Accounts payable
$626,000
$310,000
Current maturities of serial bonds payable
550,000
550,000
Serial bonds payable, 10%
2,520,000
3,070,000
Common stock, $1 par value
90,000
120,000
Paid-in capital in excess of par
1,020,000
1,020,000
Retained earnings
3,510,000
2,790,000
The income before income tax was $1,013,100 and $886,500 for...

Ratio of Liabilities to Stockholders' Equity and Times Interest
Earned
The following data were taken from the financial statements of
Hunter Inc. for December 31 of two recent years:
Current Year
Previous Year
Accounts payable
$522,000
$140,000
Current maturities of serial bonds payable
320,000
320,000
Serial bonds payable, 10%
1,300,000
1,620,000
Common stock, $1 par value
60,000
70,000
Paid-in capital in excess of par
670,000
680,000
Retained earnings
2,330,000
1,850,000
The income before income tax was $469,800 and $411,100 for...

6. A firm’s times interest earned ratio is 3 but its cash flow
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Using the Annual Report of Apple answer the following questions
in the Discussion: HERE IS THE LINK TO THE REPORT...
http://investor.apple.com/secfiling.cfm?filingid=1628280-16-20309&cik=320193
What is the breakdown of the company's current liabilities at
year end?
Calculate the company's times-interest-earned ratio for the year
end. What does this tell you about the company?

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