During 2019,Patty's Pizza reported net income of $4,212 million,interest expense of $167 million and income tax expense of $1,372 million.During 2018,Patty's reported net income of $3,568 million,interest expense of $163 million and income tax expense of $1,424 million.The times interest earned ratios for 2019 and 2018,respectively,are closest to:
A)32.2 and 29.4 times.
B)28.4 and 23.8 times.
C)34.4 and 31.6 times.
D)34.1 and 26.6 times.

Question

Quizplus · Accepted Answer

The times interest earned ratio is calculated as (Net Income + Interest Expense + Income Tax Expense) / Interest Expense. For 2019, it's ($4,212M + $167M + $1,372M) / $167M = 33.3 times. For 2018, it's ($3,568M + $163M + $1,424M) / $163M = 31.6 times. The closest option provided is C) 34.4 and 31.6 times.

During 2019,Patty's Pizza Reported Net Income of $4,212 Million,interest Expense