Odessa Cohas Current Assets of $10 Million and Net Income of of $20

question 188

Multiple Choice

Odessa Co.has current assets of $10 million and net income of $20 million.Current liabilities total $5 million,interest expense is $4 million,and income tax expense is $6 million.What is the times interest earned ratio for this company?

• A)0.5
• B)7.5
• C)0.3
• D)2.0

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Definitions:

Shift of Assets

Shift of assets involves reallocating or transferring assets from one investment to another or from one asset class to another.

Accounts Receivable

Money owed to a business by its customers for goods or services sold on credit.

Fees Earned

Income or revenue generated by providing services, distinct from selling goods.

Supplies

Items used in the operation of a business but not directly related to the production of goods or services, such as office supplies.