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The Times-Interest-Earned Ratio Is Calculated as EBIT Divided by Interest

question 182

True/False

The times-interest-earned ratio is calculated as EBIT divided by interest expense.


Definitions:

Exercise Control

The act of directing, managing, or commanding something or someone effectively.

Duty

In a negligence action, an obligation to live up to a reasonable standard.

Gratuitous Bailment

A legal relationship where personal property is voluntarily transferred from one party to another without expectation of payment or benefit.

Equity

Legal principles founded upon fairness, as developed in the Court of Chancery to relieve the harshness of the common law; also the value left in an asset after subtracting what the owner owes.

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