Which ratio is calculated by dividing profit before interest and taxes by total interest charges?
A) Inventory turnover
B) Fixed assets turnover
C) Total assets turnover
D) Debt-to-equity ratio
E) Times-interest-earned ratio

Question

Quizplus · Accepted Answer

The ratio calculated by dividing profit before interest and taxes by total interest charges is the times-interest-earned ratio, which measures a company's ability to pay its interest expenses on outstanding debt.

Which Ratio Is Calculated by Dividing Profit Before Interest and Taxes