Wildlife Co. reported net income of $8.3 million, interest expense of $0.5 million and $0.2 million...
Wildlife Co. reported net income of $8.3 million, interest expense of $0.5 million and $0.2 million of income tax expense. Wildlife's average total assets are $65.8 million and average stockholders' equity is $48.6 million. Wildlife's times interest earned ratio is closest to:
A. 6 times
B. 18 times
C. 41.5 times
D.45 times
Homework Answers
Interest earned ratio = Income before interest and taxes / Interest expense
Income before interest and taxes = 8.3 + 0.5 + 0.2 = 9
Interest earned ratio = 9 / 0.5 = 18 times
Option B is correct.
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