Which of the following is included in the numerator of the times-interest-earned ratio?
A) Net income
B) Net Operating Income
C) Interest expense
D) Gross profit

Question

Quizplus · Accepted Answer

The times-interest-earned ratio is calculated by dividing earnings before interest and taxes (EBIT), also known as net operating income, by the interest expense. This ratio measures a company's ability to meet its interest payments.

Which of the Following Is Included in the Numerator of the Times-Interest-Earned