Cutsinger Corporation Has Provided the Following Data from Its Most

question 75

Multiple Choice

Cutsinger Corporation has provided the following data from its most recent income statement:
$\begin{array}{lr}\text { Net operating income }&\$55,000\\\text {interest expense. }&\$43,000\\\text { Net income before taxes. }&\$12,000\\\text { income taxes }&\$4,000\\\text {Net income. }&\$8,000\\\end{array}$
The times interest earned ratio is closest to:

• A) 1.83
• B) 0.28
• C) 1.28
• D) 0.19

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Definitions:

Recurring Expense

Ongoing financial obligations that individuals or businesses regularly pay, such as rent, utilities, or subscription services.

Fixed Expense

Costs that do not change from period to period, such as rent or mortgage payments, providing predictability in budgeting.

Monthly Budget

A financial plan that allocates future personal income towards expenses, savings, and debt repayment.

Electric Bill

A monthly statement that accounts for the consumption of electricity and the cost associated with it.