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awaya Company had depreciation and amortization expenses of $522,311, interest expenses of $114,077, and an EBITDA of $1,521,087 for the year ended June 30, 2010. What is the Times Interest Earned for this company?

Respuesta :

Answer:

8.76

Explanation:

The formula and the computation of the times interest earned is shown below:

Times earned interest = (Earnings before income tax and interest expense) ÷ (Interest expense)

where,  

Earnings before interest and tax expense is

= EBITDA - depreciation and amortization expense

= $1,521,087 - $522,311

= $998,776

And, the interest expense is $114,077

So, the times interest earned ratio is  

= $998,776 ÷ $114,077

= 8.76

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