Numbers of times interest charges are earned is computed as Income before income

Question

Numbers of times interest charges are earned is computed as

Income before income taxes – Interest expense ÷ Interest expense

Income before income taxes ÷ Interest expense

Income before income taxes + Interest expense ÷ Interest revenue

Income before income taxes + Interest expense ÷ Interest expense

Income before income taxes – Interest expense ÷ Interest expense

Income before income taxes ÷ Interest expense

Income before income taxes + Interest expense ÷ Interest revenue

Income before income taxes + Interest expense ÷ Interest expense

Explanation / Answer

The correct answer is :

Income before income taxes + Interest expense ÷ Interest expense

This helps us to understand the ability of the organisation to meet its liability to repay the debts.

Income before income taxes + Interest expense ÷ Interest expense

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