Which Ratio Is Calculated by Dividing Profit Before Interest and Taxes

question 99

Multiple Choice

Which ratio is calculated by dividing profit 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:

Comparative Balance Sheet

A financial statement that presents the balances of assets, liabilities, and equity at two or more points in time, allowing for comparison and analysis.

Current Income Statement

A financial report showing a company's revenues, expenses, and net income over a specific period, typically a quarter or year.

Prior Year's Income Statement

A financial report that shows a company's financial performance in terms of revenue, expenses, and net income for the previous fiscal year.

Statement of Cash Flows Worksheet

A financial document used to analyze and prepare the statement of cash flows, showing how cash changes from operating, investing, and financing activities.