Question

Ron Landscaping's income statement reports net income of $73,300, which includes deductions for interest expense of $10,500 and income taxes of $32,900. Its times interest earned is:

Answer 1

Answer: 11.1 times

Explanation:

Times Interest Ratio = Earnings before Interest and Tax/ Interest

Earnings before Interest and tax = Net Income + Interest + Tax

= 73,300 + 10,500 + 32,900

= $116,700‬

Times Interest ratio = 116,700/10,500

= 11.1 times