Ron Landscaping's income statement reports net income of $75,200, which includes deductions for interest expense of $13,200 and

Question

Ratling [72]

3 years ago

15

Ron Landscaping's income statement reports net income of $75,200, which includes deductions for interest expense of $13,200 and

income taxes of $36,900. Its times interest earned is ________.

Business

1 answer:

kaheart [24] · Answer 1 · 2022-07-26T12:36:34+03:00

Answer:

times interest earned= 9.49

Explanation:

Giving the following information:

Ron Landscaping's income statement reports net income of $75,200, which includes deductions for interest expense of $13,200 and income taxes of $36,900.

First, we need to calculate the income before taxes and interest expense:

EBIT= 75,200 + 13,200 + 36,900= $125,300

Now, to calculate the times interest earned we need to use the following formula:

times interest earned= EBIT/ interest expense= 125,300/13,200= 9.49