Citrine Company reported the following on its income statement:
An analysis of the income statement revealed that interest expense was $50,000.Citrine Company's times-interest-earned ratio was:

A) 11.
B) 5.
C) 18.
D) 9.

Question

Citrine Company reported the following on its income statement: 
An analysis of the income statement revealed that interest expense was $50,000.Citrine Company's times-interest-earned ratio was:

A) 11. 
B) 5. 
C) 18. 
D) 9.

Quizplus · Accepted Answer

Times-Interest-Earned Ratio = (Income Before Taxes + Interest Expense) / Interest Expense
= ($500,000 + $50,000)  / $50,000
= 11

Citrine Company Reported the Following on Its Income Statement