Calculate the Times Interest Earned Ratio Using the Following Information

question 133

Multiple Choice

Calculate the times interest earned ratio using the following information. Sales = $1.5 million, cost of goods sold = $800,000, depreciation expense = $100,000, addition to retained earnings = $85,000, dividends per share = $1.2, tax rate = 30 percent, and number of shares of common stock outstanding = 100,000. Assume the firm has no preferred stock.

• A) 2.25 times
• B) 1.25 times
• C) 1.95 times
• D) 2.75 times

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Definitions:

Positive Ones

Refers to situations, experiences, or aspects that have a beneficial impact on an individual's life or well-being.

Feeling of Superiority

An attitude or belief that one is more valuable or important than others, often leading to dismissive or condescending behavior.

Negative Energy

A concept often used to describe a feeling or atmosphere of pessimism, unhappiness, or toxicity that can affect individuals’ mood and well-being.

Positive Reinforcement

A technique in behavior management that involves giving a reward to encourage the repetition of a desired action.