AEI Incorporated has $5 billion in assets, and its tax rate is 40%. Its basic earnings power (BEP) ratio is 10?

AEI Incorporated has $5 billion in assets, and its tax rate is 40%. Its basic earnings power (BEP) ratio is 10%, and its return on assets (ROA) is 5%. What is AEI’s times-interest earned (TIE) ratio?

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  • Bobbie
    Lv 7
    8 years ago
    Favorite Answer

    What is Basic Earnings Power Ratio

    The basic earning power ratio (or BEP ratio) compares earnings apart from the

    influence of taxes or financial leverage, to the assets of the company. It is just a ...

    wiki.answers.com/Q/What_is_Basic_Earnings_Power_Ratio

    The basic earning power ratio (or BEP ratio) compares earnings apart from the influence of taxes or financial leverage, to the assets of the company. It is just a ratio of the earnings of the company and its assets and does not include the capital invested into the company or the tax and interest liabilities.

    Formula:

    BEPR = EBIT / Total Assets

    http://wiki.answers.com/Q/What_is_Basic_Earnings_P...

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