Question: Here are some data for five companies in the same industry: Company Code A B C D E EBIT 28.00 68.00 208.00 14.00 246.00 Interest

Here are some data for five companies in the same industry:

Company Code
A B C D E
EBIT 28.00 68.00 208.00 14.00 246.00
Interest expense 7.00 17.00 52.00 4.00 3.00

a. Calculate a measure of times-interest-earned for the industry.

b. Calculate a measure of times-interest-earned for each company.

c. Calculate the average of the times-interest-earned ratios for the individual companies.

d. Does changing the method of calculation make a significant difference to the end result?

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