The financial statements of Black Barn Company are given below
-Refer to the financial statements of Black Barn Company.The firm's times interest earned ratio for 2009 is _____.

Question

The financial statements of Black Barn Company are given below 
-Refer to the financial statements of Black Barn Company.The firm's times interest earned ratio for 2009 is _____.

Quizplus · Accepted Answer

The times interest earned ratio is calculated by dividing the earnings before interest and taxes (EBIT) by the interest expense. For 2009, Black Barn Company's EBIT is $1,000,000 and its interest expense is $113,000. Therefore, the times interest earned ratio is $1,000,000 / $113,000 = 8.86.

The Financial Statements of Black Barn Company Are Given Below