Key figures for Apple and Google follow. *Apple did not report interest expense for these periods. Amounts
Question:
*Apple did not report interest expense for these periods. Amounts included in this table are assumed for purposes of this analysis.
Required
1. Compute times interest earned for the three years' data shown for each company.
2. Comment on which company appears stronger in its ability to pay interest obligations if income should decline. Assume an industry average of 10.
Transcribed Image Text:
Apple Google One Two One Year Prior Two Years Prior Current Current Year Year Prior Years ($ millions) Net income Year Prior $41,733 $10,737 2,598 $9,737 2,589 $25,922 8,283 1,000 $8,505 $14,013 4,527 Income taxes 2,291 14,030 Interest expense* 84 1,000 1,000 58
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