Refer to the financial statements of Research In Motion in Appendix A to answer the following.
1. Compute times interest earned for the fiscal years ended 2010, 2009, and 2008. Comment on RIM’s ability to cover its interest expense for this period. Assume interest expense of $1, $502, and $31 for fiscal years ended 2010, 2009, and 2008 ($ thousands); and, assume an industry average of 18.1 for times interest earned.
2. RIM’s current liabilities include “deferred revenue”; assume that this account reflects “Unredeemed gift card liabilities.” Explain how this liability is created and how RIM satisfies this liability.
3. Does RIM have any commitments or contingencies? Briefly explain them.