Last year,Javer Company had a net income of $200,000,income tax expense of $74,000,and interest expense of $20,000.The company's times interest earned was closest to which of the following?
A) 5.30 times.
B) 10.00 times.
C) 11.00 times.
D) 14.70 times.

Question

Quizplus · Accepted Answer

The times interest earned ratio is calculated by adding net income, income tax expense, and interest expense, then dividing by the interest expense. For Javer Company, this calculation is: ($200,000 + $74,000 + $20,000) / $20,000 = $294,000 / $20,000 = 14.70 times.

Last Year,Javer Company Had a Net Income of $200,000,income Tax