Number of times interest charges are earned
Katula Company reported the following on the company's income statement in 2012 and 2011:
|
2012
|
2011
|
|
Interest expense
|
$250,000
|
$275,000
|
|
Income before income tax expense
|
3,100,000
|
4,400,000
|
a. Determine the number of times interest charges were earned for 2011 and 2012. Round to one decimal place.
b. Is the number of times interest charges are earned improving or declining?