What is the denominator of the times-interest-earned ratio?
A) finance costs
B) profit for the year
C) finance costs less income taxes
D) profit before taxes

Question

Quizplus · Accepted Answer

The denominator of the times-interest-earned ratio is finance costs, as this ratio measures a company's ability to cover its interest expenses with its earnings before interest and taxes.

What Is the Denominator of the Times-Interest-Earned Ratio