Question

Assume that Verizon Communications, Inc. reports the following selected balance sheet and income statement information for 2012 through 2014 ($ millions).
Total Current Assets Total Current Liabilites Pretax Income Interest Expense Total Liabilities Stockholders' Equity
2012 $18,293 $26,570 $6,344 $2,797 $108,154 $57,814
2013 19,479 23,159 12,521 2,384 103,345 62,613
2014 16,448 25,063 13,652 2,180 74,942 66,434
Compute times interest earned for 2014. Select one: A. 5.26 B. 6.26 C. 7.26 D. 4.26

Answer 1

Answer:

TIE 6.26238

Explanation:

Times Interest Earned:

$\frac{EBIT}{Interest \: Expense} = 6.26238$

EBIT = earnings before Interest and Taxes

$\frac{13,652}{2,180} = 6.26238$