The Times Interest Earned Ratio Is Calculated as

question 105

Multiple Choice

The times interest earned ratio is calculated as

• A)Interest expense/Net income.
• B)Net income/Interest expense.
• C)(Net income + interest expense + tax expense)/Interest expense.
• D)Interest expense/(Net income + interest expense + tax expense).

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Definitions:

Multiple-Step Income Statement

A form of income statement that contains several sections, subsections, and subtotals.

Earnings Per Share

A financial metric indicating the portion of a company's profit allocated to each outstanding share of common stock.

Price-Earnings Ratio

A financial ratio that measures a company's current share price relative to its per-share earnings, used to evaluate the relative value of a company's shares in the market.

Partial Income Statement

An income statement that reports revenue, expenses, and net income over a specified period of time but does not include all of the details found in a comprehensive income statement.