The Times-Interest-Earned Ratio Is Calculated as ________

question 215

Multiple Choice

The times-interest-earned ratio is calculated as ________.

• A) earnings before interest and tax divided by interest expense
• B) profit before tax divided by interest expense
• C) net income divided by interest expense
• D) income tax expense plus interest expense divided by interest expense

---

Definitions:

Normal Model

A probability distribution that is symmetrical about its average, indicating that occurrences close to the mean are more common than those further away.

Central 68%

Central 68% is a statistical term that refers to the percentage of data within one standard deviation of the mean in a normal distribution, implying that about 68% of the data fall within this range.

Standard Deviation

A measure of the amount of variation or dispersion in a set of values, indicating how much the values differ from the mean.

IQR

Interquartile Range, a measure of variability, indicates the range within which the middle 50% of a data set lies.