Albany Company has net income before taxes of $90,000,interest expense of $36,000 and an income tax rate of 20%.Based on this information,the company's times interest earned ratio is:

Question

Quizplus · Accepted Answer

The times interest earned ratio is calculated as (Net Income before Taxes + Interest Expense) / Interest Expense. Here, it is ($90,000 + $36,000) / $36,000 = 3.5 times.

Albany Company Has Net Income Before Taxes of $90,000,interest Expense