A company reports the following: Income before income tax $8,000,000 Interest expense 500,000

A company reports the following:

Income before income tax $8,000,000
Interest expense 500,000

Determine the number of times interest charges are earned.

Answer:












Income Before Income Tax +
Interest Expense
Interest Charges Are Earned  =
Number of Times
Interest Expense

$8,000,000 + $500,000
Interest Charges Are Earned  =
Number of Times
Interest Charges Are Earned  =
17.0 

A company reports the following:

Income before income tax $4,000,000
Interest expense 400,000

Determine the number of times interest charges are earned.

Answer:
Income Before Income Tax + Interest Expense Interest Charges Are Earned Number of Times Interest Charges Are Earned  = Number of Times  Interest Expense  $4,000,000 + $400,000 $400,000 Interest Charges Are Earned  =   11.0