Question

Kenesha Co. reported income before interest expense and income taxes of $30,000; interest expense of $3,000; and income taxes of $4,000. Calculate the times interest earned ratio.

Answer 1

Answer:

the times interest earned ratio is 10

Explanation:

The computation of the times interest earned ratio is shown below:

Times interest earned ratio is

=  income before interest expense and income taxes ÷ interest expense

= $30,000 ÷ $3,000

= 10

hence, the times interest earned ratio is 10

We simply applied the above formula so that the correct value could come

And, the same is to be considered