Belkorp had a net income of $100,000 paid income taxes of $30,000 and incurred interest expense of $8,000 what was that times interest earned ratio

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Business

Tiffany Jones

10 August, 16:38

Belkorp had a net income of $100,000 paid income taxes of $30,000 and incurred interest expense of $8,000 what was that times interest earned ratio

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Malachi Novak · Answer 1

Formula for times interest earned: Income before interest and taxes / interest expense

Because net income already has the amounts of $30,000 and $8,00 deducted from the amount, you would need to add those back in order to achieve the income before interest and taxes. Once doing so you should have $138,000 which you divide by the interest expense, $8,000.

138,000/8,000=17.25 times