Use the present value and future value tables included in Appendix 8 and on the textbook companion website.
- Hakeem, Inc. reported the following data in its 2011 financial statements: total liabilities $38,400; total stockholders' equity, $19,200; net income, $4,320; income tax expense, $2,880; and interest expense, $2,400. The times interest earned ratio is

Question

Use the present value and future value tables included in Appendix 8 and on the textbook companion website. 
- Hakeem, Inc. reported the following data in its 2011 financial statements: total liabilities $38,400; total stockholders' equity, $19,200; net income, $4,320; income tax expense, $2,880; and interest expense, $2,400. The times interest earned ratio is

Quizplus · Accepted Answer

The times interest earned ratio is calculated by dividing the net income by the interest expense. In this case, the net income is $4,320 and the interest expense is $2,400, so the times interest earned ratio is $4,320 / $2,400 = 1.8 times.

Use the Present Value and Future Value Tables Included in Appendix