Wildlife Co.reported net income of $8.3 million,interest expense of $0.5 million and $0.2 million of income tax expense.Wildlife's average total assets are $65.8 million and average stockholders' equity is $48.6 million.Wildlife's times interest earned ratio is closest to:
A)41.5 times
B)6 times
C)18 times
D)45 times

Question

Quizplus · Accepted Answer

Times interest earned ratio = (Net Income + Interest Expense + Income Tax Expense) / Interest Expense

= ($8.3 million + $0.5 million + $0.2 million) / $0.5 million

= 18 times

Therefore, the closest answer choice is C) 18 times.