Times interest earned ratio


For the most recent year, Wilson Enterprises had sales of $689,000, cost of goods sold of $470,300, depreciation expense of $61,200, and additions to retained earnings of $48,560. The firm currently has 12,000 shares of common stock outstanding, and the previous year's dividends per share were $1.18. Assuming a 35 percent tax rate, what was the times interest earned ratio?

a) 1.47

b) 2.09

c) 2.58

d) 3.15

e) 3.67

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Finance Basics: Times interest earned ratio
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