The times interest earned is computed by dividing
A)net income by interest expense.
B)income before taxes by interest expense.
C)income before income taxes and interest expense by interest expense.
D)net income and interest expense by interest expense.

Question

Quizplus · Accepted Answer

The times interest earned ratio is calculated by dividing income before income taxes and interest expense by interest expense. This measures a company's ability to meet its interest obligations.

The Times Interest Earned Is Computed by Dividing