Asked by Shahd Ajlani on Jun 03, 2024
Verified
Ron Landscaping's income statement reports net income of $75,300,which includes deductions for interest expense of $11,500 and income taxes of $34,900.Its times interest earned is:
A) 10.6 times
B) 7.5 times
C) 4.0 times
D) 6.5 times
E) 0.15 times
Times Interest Earned
A financial metric indicating how many times a company's operating income can cover its interest expense, used to assess financial stability.
Net Income
The total profit of a company after all expenses and taxes have been deducted from total revenues.
Interest Expense
The cost incurred by an entity for borrowed funds; interest expense is a non-operating cost shown on the income statement.
- Familiarize yourself with the procedure for ascertaining various financial ratios, including debt-to-equity, equity ratio, debt ratio, and times interest earned.
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Learning Objectives
- Familiarize yourself with the procedure for ascertaining various financial ratios, including debt-to-equity, equity ratio, debt ratio, and times interest earned.
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