Asked by
Zaniya Lampkins
on Nov 08, 2024
Verified
The times interest earned ratio is defined as:
A) Net income divided by interest expense.
B) Interest expense divided by net income.
C) EBIT divided by interest expense.
D) Interest expense divided by EBIT.
E) Sales divided by interest expense.
Times Interest Earned
A financial metric assessing a company's ability to meet its interest obligations from its earnings before interest and taxes.
Interest Expense
The cost incurred by an entity for borrowed funds over a period, represented as a financial charge or fee.
- Digest the associations among profitability, asset management, and leverage ratios.
- Understand the importance of crucial financial ratios for assessing long-term solvency and operational performance.
Verified Answer
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Learning Objectives
- Digest the associations among profitability, asset management, and leverage ratios.
- Understand the importance of crucial financial ratios for assessing long-term solvency and operational performance.
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