For analytical purposes, anyone know why you should add interest expense to both income and expense? i.e. EBIT and interest expense increase by the same total amount. However, the interest coverage ratio falls.
Before I attempt to explain this just check if the curricullum actually covers this. I think Schweser’s been a little stupid here by overcomplicating it… Check if the TB dives into the interest coverage ratio at all w.r.t sale of receivables with recourse…