Briar Patch Fruits has sales of $529,600,cost of goods sold of $408,350,depreciation of $25,400,and interest expense of $9,100.The tax rate is 35 percent.What is the times interest earned ratio?
A)10.53
B)9.46
C)8.87
D)4.38
E)4.79

Question

Quizplus · Accepted Answer

The times interest earned (TIE) ratio is calculated as (Earnings Before Interest and Taxes) / Interest Expense. EBIT = Sales - Cost of Goods Sold - Depreciation = $529,600 - $408,350 - $25,400 = $95,850. TIE = $95,850 / $9,100 = 10.53.

Briar Patch Fruits Has Sales of $529,600,cost of Goods Sold