A company has current assets of 833 million and net income o

A company has current assets of $8.33 million and net income of $10.9 million. Current liabilities total $3.4 million, interest expense is $2.9 million, and income tax expense is $3.9 million. What is the times interest earned ratio for this company? (Round your final answer to 2 decimal places.) O 245 0.41 6.10 O . 0.36

Solution

C.6.10.

times interest earned = EBIT / interest expense.

here,

EBIT = net income + income tax expense + interest expense

=>$10.9 + 2.9 + 3.9

=>$17.7 million.

now,

times interest earned = $17.7 million / $2.9 million

=>6.10 times.