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gayaneshka [121]
3 years ago
13

Times interest earned is calculated by:

Business
1 answer:
pickupchik [31]3 years ago
7 0

Answer:

C)  Dividing income before interest expense and income taxes by interest expense.

Explanation:

Times interest earned is the interest coverage ratio. This explains how many times a company is able to cover its interest expense as relative to its income.

This is calculated by Dividing income before interest expense and income taxes by the interest incomes. This basically conveys signals about the performance of the company and its solvency by finding a performance measure of how many times a company can pay off its debt obligations.

A higher interest times earned metric means a healthier firm.

Hope that helps.

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