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.

---

Definitions:

Legal Right

An entitlement or permission under the law that enables individuals to act in a certain way or to be treated in a specific manner.

Warning Sign

An indicator, often on road signs or in notifications, that alerts individuals to potential hazards or dangers.

Potential Suicide

Potential suicide refers to the risk or likelihood that an individual will attempt to end their own life.

Student Behaviors

The range of actions and mannerisms exhibited by students in an educational setting, influencing their learning experience.