Which Ratio Is Calculated by Dividing Profits Before Interest and Taxes

question 56

Multiple Choice

Which ratio is calculated by dividing profits before interest and taxes by total interest charges?

• A) Inventory turnover
• B) Fixed assets turnover
• C) Total assets turnover
• D) Debt-to-equity ratio
• E) Times-interest-earned ratio

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Definitions:

Louisiana Territory

A vast region of North America that was purchased by the United States from France in 1803, doubling the size of the country and opening the way for westward expansion.

Gateway

A point of entry or access, often used metaphorically to describe something that serves as an entrance to something else, such as a technology, idea, or country.

Corruption

Dishonest or fraudulent conduct by those in power, typically involving bribery or the misappropriation of resources.

English Colonists

Early settlers from England who established colonies in various parts of the world, including North America, during the 16th to 18th centuries.