Cutsinger Corporation has provided the following data from its most recent income statement: The times interest earned ratio is closest to:
A) 1.83
B) 0.28
C) 1.28
D) 0.19

Question

Cutsinger Corporation has provided the following data from its most recent income statement:  The times interest earned ratio is closest to:
A) 1.83 
B) 0.28 
C) 1.28 
D) 0.19

Quizplus · Accepted Answer

First, we need to calculate the times interest earned ratio which is earnings before interest and taxes (EBIT) divided by interest expense. Using the information from the income statement given, we can calculate as follows:
Times Interest Earned Ratio = EBIT / Interest Expense = 760,000 / 595,000 = 1.28
Therefore, the closest answer choice is C.

Cutsinger Corporation Has Provided the Following Data from Its Most