Which of the following statements are correct with respect to the times interest earned ratio?
I. It is independent of operating income
II. It is independent of the interest rate paid on debt
III. It is independent of the tax rate
IV. It is independent of the amount of dividends paid
A) I, II and III
B) I and III
C) I and IV
D) III and IV

Question

Quizplus · Accepted Answer

The times interest earned ratio is calculated as operating income divided by interest expense, making it independent of the tax rate and the amount of dividends paid.

Which of the Following Statements Are Correct with Respect to the Times