The Times Interest Earned Ratio Is Calculated by Dividing Income

question 62

True/False

The times interest earned ratio is calculated by dividing income before interest and income taxes by interest expense.

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Definitions:

Variable Costs

Expenses that change in proportion to the activity or volume of a business.

Brand Equity

The value and strength of a brand that is determined by consumer perception, recognition, and loyalty.

Stakeholder Orientation

An approach in business where a company takes into account the interests and concerns of all parties affected by its operations, including customers, employees, shareholders, and the community.