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Calculate Delta Airlines times-interest-earned ratio for the year end for 2016 and What does this tell...

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

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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.

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