The following information was obtained from Quayle Company's income statement: $\begin{array}{lr}
\text { Income before Interest and Income Tax Expense } & \$ 685,000 \
\text { Interest Expense } & 75,000 \
\text { Income before Income Tax Expense } & 610,000 \
\text { Income Tax Expense } & 213,500 \
\text { Net Income } & \$ 396,500
\end{array}$ What is the times interest earned ratio?
A)5.29
B)8.13
C)9.13
D)1.73

Question

Quizplus · Accepted Answer

The times interest earned ratio is calculated as $ \frac{\text{Income before Interest and Income Tax Expense}}{\text{Interest Expense}} = \frac{685,000}{75,000} = 9.13 $.

The Following Information Was Obtained from Quayle Company's Income Statement