Which of the following is the formula to compute times-interest-earned?
A)Income from operations/interest expense
B)Interest expense/income from operations
C)Total liabilities/total assets
D)Total assets/total liabilities

Question

Quizplus · Accepted Answer

Times-interest-earned is calculated by dividing income from operations by interest expense. This formula gives an indication of how easily a company can meet its interest payments through the income it generates from its operations.

Which of the Following Is the Formula to Compute Times-Interest-Earned