In 2015 Rome Corporation reported net income $190,000, interest expense $60,000, and income tax expense $40,000. Rome's times interest earned ratio was:
A)4.2 times.
B)3.8 times.
C)3.2 times.
D)4.8 times.

Question

Quizplus · Accepted Answer

The times interest earned ratio is calculated as (Net Income + Interest Expense + Income Tax Expense) / Interest Expense. For Rome Corporation: ($190,000 + $60,000 + $40,000) / $60,000 = 4.8 times.

In 2015 Rome Corporation Reported Net Income $190,000, Interest Expense