The Hr Picket Corporation has a $500,000 of debt out standing and it pays an interest rate of 10% annually. Pickets annual sales are 2 Million dollars and its average tax rate is 30% and its net profit margin on sales is 5%. If the company does not maintain a TIE ratio of at least 5 times its bank will refuse to renew the loan and bankrupts will result. What is Pickets TIE?© BrainMass Inc. brainmass.com March 4, 2021, 6:01 pm ad1c9bdddf
The Times Interest Earned (TIE) Ratio= Profit before Interest and Taxes/Total Interest ...
The solution calculates Times Interest Earned (TIE) Ratio.