The times interest earned ratio is calculated by dividing
A)profit by interest expense.
B)profit plus income tax expense by interest expense.
C)profit plus interest expense by interest expense.
D)profit plus interest expense plus income tax expense by interest expense.

Question

Quizplus · Accepted Answer

The times interest earned ratio is calculated by dividing earnings before interest and taxes (EBIT) by interest expense, which corresponds to profit plus interest expense plus income tax expense divided by interest expense.

The Times Interest Earned Ratio Is Calculated by Dividing