Company X has net sales revenue of $436,000,cost of goods sold of $343,000,and net income of $3,000.If interest expense is $10,000 and income tax expense is $1,000,the times interest earned ratio is closest to:
A) 1.4.
B) 0.33.
C) 1.3.
D) 0.40.

Question

Quizplus · Accepted Answer

Times interest earned ratio = EBIT / Interest expense= (Net income + Interest expense + Income tax expense) / Interest expense= (3,000 + 10,000 + 1,000) / 10,000= 14,000 / 10,000= 1.4

Company X Has Net Sales Revenue of $436,000,cost of Goods