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10. Times-interest-earned (TIE) ratio The times-interest-earned (TIE) ratio shows how well a firm can cover...

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10. Times-interest-earned (TIE) ratio The times-interest-earned (TIE) ratio shows how well a firm can cover its interest payments with operating income. Compare the income statements of Lost Pigeon Aviation and Happy Turtle Transporters Incorporated and calculate the TIE ratio for each firm. Complete the following statement, based on the calculations you have already made. Describe the relationship between the TIE ratios of the two companies. The companies have equal TIE ratios. Lost Pigeon Aviation has a greater TIE ratio than Happy Turtle Transperters incorporated. Happy Turtle Transporters Incorporated has a greater TIE ratio than Lost Pigeon Aviation. Which company is in better position to cover its interest payments, and therefore exhibits lower risk, than the other? Happy Turtie Transporters Incorporated is in a better position to cover its interest payment. Both companies are equally positioned to cover their interest poyments. Lost Pigeon Aviation is in a better position to cover its interest payment

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