FCCR =Earnings Before Interest and Taxes(EBIT) + Lease Payments / Interest Expense + Lease Payments EBIT, Taxes, and Interest Expense are taken from thecompany's income statement. Lease Payments are taken from thebalance sheetand are usually shown as a footnote on the balance sheet. The result...
No, times interest earned is not a profitability ratio. It is a solvency ratio. The ratio does not seek to determine how profitable a company is but rather its capability to pay off its debt and remain financially solvent. If a company can no longer make interest payments on its debt, it...