SportsWorld Had Income Before Interest and Income Tax Expense of $395,000

question 196

Essay

SportsWorld had income before interest and income tax expense of $395,000 in Year 1 and $427,000 in Year 2.Its interest expense was $125,000 for both years.Calculate the times interest earned ratio for both years and comment on the company's level of risk.

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Definitions:

Employer-Independent Contractor

A working relationship where the contractor provides services under a contract for a specific task, without being entitled to employee benefits or subject to the same control as an employee.

Independent Contractors

Individuals or entities hired to perform specific tasks or services, who maintain control over how their work is completed, rather than employees.

Authorizes

To give official permission or power to someone to do something.

Building Contractors

are professionals involved in the planning, leading, execution, supervision, and inspection of a building construction process.