Last year Fuller Company had a net income of $410,000, income tax expense of $50,000, and interest expense of $34,000. The company's times-interest-earned ratio was closest to
A) 12.06.
B) 9.88.
C) 14.53.
D) 13.53.

Question

Quizplus · Accepted Answer

The times-interest-earned ratio is calculated as (Net Income + Income Tax Expense + Interest Expense) / Interest Expense. For Fuller Company, this is ($410,000 + $50,000 + $34,000) / $34,000 = 14.53.

Last Year Fuller Company Had a Net Income of $410,000