The following information relates to Woolf Unlimited for the past two years.

What is the times-interest-earned ratio for the current year?

Question

The following information relates to Woolf Unlimited for the past two years.

What is the times-interest-earned ratio for the current year?

Quizplus · Accepted Answer

The times-interest-earned ratio for the current year can be calculated as follows:
Net Income + Interest Expense + Income Tax Expense / Interest Expense
= 39,000 + 3,000 + 5,000 / 3,000
= 47,000 / 3,000
= 15.67 times
Therefore, the closest answer choice to the calculated ratio is B: 13.00 times.

The Following Information Relates to Woolf Unlimited for the Past