Interest expense was $20,000, income tax expense $26,000, and net income after taxes is $44,000. The number of times interest was earned is: (Round your answer two decimal places.)

Question

Quizplus · Accepted Answer

The number of times interest was earned, also known as the interest coverage ratio, is calculated by adding net income after taxes back to interest expense and income tax expense, then dividing by the interest expense. Calculation: ($44,000 + $20,000 + $26,000) / $20,000 = 4.50 times.

Interest Expense Was $20,000, Income Tax Expense $26,000, and Net