Question

Presented here are summarized data from the balance sheets and income statements of Wiper Inc.: WIPER INC. Condensed Balance Sheets December 31, 2020, 2019, 2018 (in millions) 2020 Current assets $ 683 Other assets 2,416 Total assets $ 3,099 Current liabilities $ 576 Long-term liabilities 1,513 Stockholders' equity 1,010 Total liabilities and stockholders' equity $3,099 2019 $ 915 1,923 $ 2,838 $ 806 1,003 1,029 $2,838 2018 $ 763 1,722 $ 2,485 $ 713 851 921 $2,485 2019 WIPER INC. Selected Income Statement and Other Data For the year Ended December 31, 2020 and 2019 (in millions) 2020 Income statement data: Sales $3,053 Operating income 299 Interest expense 87 Net income 200 Other data: Average number of common shares outstanding 41.6 Total dividends paid $ 53.0 $2,916 313 68 195 47.0 $ 52.6

Answer 1

TIMES INTEREST EARNED RATIO = (Earnings before interest and taxes) / Interest expense

313 /68 = 4.6