The interest coverage ratio equals
A)income before income taxes minus interest expense divided by income before income taxes.
B)income before income taxes minus interest expense divided by interest expense.
C)income before income taxes plus interest expense divided by interest expense.
D)income before income taxes plus interest expense divided by total assets.

Question

Quizplus · Accepted Answer

The interest coverage ratio is calculated as income before income taxes plus interest expense divided by interest expense. This measures a company's ability to make interest payments on its debt.

The Interest Coverage Ratio Equals