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Refer to the following selected financial information from Graphics, Inc. Compute the company's times interest earned.Interest expense 9,100Income tax expense 22,700Net income after tax 56,500

Respuesta :

Answer:

9.70 times

Explanation:

The formula and the calculation of the times interest earned ratio is computed below:

Times interest earned ratio = (Earnings before interest and taxes) ÷ (Interest expense)

where,  

Earnings before interest and taxes = Net income after tax + interest expense + income tax expense

=$56,500 + $9,100 + $22,700

= $88,300

And, the interest expense is $9,100

Now place these values in the formula above,

so the ratio would be equal to

= $88,300 ÷ $9,100

= 9.70 times

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