The Times Interest Earned Ratio Is Based on Net Income

question 89

True/False

The times interest earned ratio is based on net income because that is the amount of earnings that is available for making interest payments. Interest expense is deducted before taxes are determined; creditors have first claim on the earnings before taxes are paid.

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Definitions:

Mode

The value that appears most frequently in a set of data.

Mean

The average of a set of numbers, calculated by dividing the sum of all the numbers by the count of the numbers.

Price Per Gallon

The cost of one gallon of a substance, often used in the context of fuel pricing.