Financial statements for Nardella Company appear below:
-Nardella Company's times interest earned for Year 2 was closest to:
A) 7.8
B) 4.8
C) 12.8
D) 6.8

Question

Financial statements for Nardella Company appear below:  
-Nardella Company's times interest earned for Year 2 was closest to:
A) 7.8 
B) 4.8 
C) 12.8 
D) 6.8

Quizplus · Accepted Answer

The times interest earned ratio is calculated by dividing the company's earnings before interest and taxes (EBIT) by the interest expense. The choice closest to the calculated ratio is 7.8.

Financial Statements for Nardella Company Appear Below