In a recent year, sherwood day corporation had sales of $500,000, net income of $200,000, interest expense of $40,000, and tax expense of $30,000. what was day corporation's times interest earned for the year?

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Business

Lily West

1 March, 15:15

In a recent year, sherwood day corporation had sales of $500,000, net income of $200,000, interest expense of $40,000, and tax expense of $30,000. what was day corporation's times interest earned for the year?

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Amir Lyons · Answer 1

The interest earned by the Sherwood Day Corporation is calculated by subtracting from the net income all the expenses including the interest expense and the tax expense. Mathematically,

interest earned = $200,000 - ($40,000 + $30,000)

= $130,000