Numbers of times interest charges earned is computed as
A) Income before income taxes plus Interest Expense divided by Interest Expense
B) Income before income taxes less Interest Expense divided by Interest Expense
C) Income before income taxes divided by Interest Expense
D) Income before income taxes plus Interest Expense divided by Interest Revenue

Question

Quizplus · Accepted Answer

The times interest earned ratio is calculated by dividing income before income taxes and interest expense by the interest expense, which is option A.

Numbers of Times Interest Charges Earned Is Computed as