Question

In a recent year hart corporation had net income of $125,000, interest expense of $30,000, and tax expense of $40,000. what was hart corporation’s times interest earned for the year?

Answer 1

Net income = $125,000

Interest expense = $30,000

Tax expense = $40,000

Interest times hart corporation earned for the year = ?

First add all the expenses and then divided by interest expense to get interest times.

= ($125,000 + $30,000 + $40,000) / $30,000

= $195,000 / $30,000

= 6.5