Based on the Following Information Calculate the Times Interest Earned

question 113

Multiple Choice

Based on the following information calculate the times interest earned of the company. $$\begin{array} { | l | r } \hline\text { Total Assets } & \mathbf { \$ 3 0 7 , 5 0 0 } \\\hline \text { Total liabilities } & 142,500 \\\hline \text { Total stockholder's Equity } & 165,000 \\\hline \text { Net income } & 97,500 \\\hline \text { Income tax expense } & 6,000 \\\hline \text { Interest expense } & 750 \\\hline\end{array}$$

• A)122
• B)129
• C)130
• D)139

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Definitions:

Leverage Ratios

Financial metrics used to assess a company's ability to meet its financial obligations, with a focus on its use of debt.

Asset Management Ratio

Asset Management Ratio is a financial metric that assesses how effectively an organization is managing its assets to generate revenue, including turnover ratios for inventory, receivables, and fixed assets.

Economic Order Quantity

The amount of inventory a company should order to minimize its total inventory costs, including holding and ordering costs.

Fixed Quantity Inventory

A stock management strategy where inventory levels are replenished to a specific, predetermined quantity at regular intervals.