EX 14-14 Number of times interest charges are earned
The following data were taken from recent annual reports of Southwest Airlines, which operates a low-fare airline service to over 50 cities in the United States.
|
Current Year |
Preceding Year |
|
|
Interest expense |
$105,000,000 |
$69,000,000 |
|
Income before income tax |
278,000,000 |
1,058,000 |
a. Determine the number of times interest charges were earned for the current and preceding years. Round to one decimal place.
b. What conclusions can you draw?