In a recent year Hill Corporation had net income of $140,000, interest expense of $40,000, and tax expense of $20,000. What was Hill Corporation's times interest earned ratio for the year?
A) 5.00
B) 4.00
C) 3.50
D) 3.00

Question

Quizplus · Accepted Answer

The times interest earned ratio is calculated as (Net Income + Interest Expense + Tax Expense) / Interest Expense. For Hill Corporation, it is ($140,000 + $40,000 + $20,000) / $40,000 = 5.00.

In a Recent Year Hill Corporation Had Net Income of $140,000