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An analysis of the income statement revealed that interest expense was $100000. Waterway Company's times interest earned was
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An analysis of the income statement revealed that interest expense was $100000. Waterway Company's times interest earned was

User Alyssa Ross
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1 Answer

16 votes
16 votes

Answer: 8.3

Step-by-step explanation:

The times interest earned is used to estimate the ability of a company to pay its debt payments using income from operations.

It is calculated by the formula:

= Earnings before interest and tax / Interest expense

Earnings before interest and tax:

= Earnings before tax + Interest expense

= 730,000 + 100,000

= $830,000

Times interest earned:

= 830,000 / 100,000

= 8.3

An analysis of the income statement revealed that interest expense was $100000. Waterway-example-1
User Dittimon
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