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tester [92]
3 years ago
14

The berry patch has sales of $438,000, cost of goods sold of $369,000, depreciation of $37,400, and interest expense of $13,800.

the tax rate is 35 percent. what is the times interest earned ratio?
Business
1 answer:
12345 [234]3 years ago
4 0

Times interest earned ratio is calculated with the help of following formula:


Times interest earned ratio = Income before interest and tax / Interest


Income before interest and tax is calculated with the help of following formula:

Income before interest and tax = Sales – Cost of Goods Sold- Depreciation

Income before interest and tax = 438000-369000-37400 = 31,600


Hence, Times interest earned ratio = Income before interest and tax / Interest = 31600 / 13800 =<u> 2.29 times</u>



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