What is its tie ratio


Problem:

The H.R. Pickett Corp. has $500,000 of debt outstanding , and it pays an annual interest rate of 10%. Its annual sales are $2 million, its average tax rate is 30%, and its net profit margin is 5%.

Required:

Question: What is its TIE ratio?

Note: Please explain comprehensively and give step by step solution.

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Accounting Basics: What is its tie ratio
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