what is the TIMES INTEREST EARNED? MENT RESOURCES f Exercise 10-1 Your answer is

Question

what is the TIMES INTEREST EARNED?

MENT RESOURCES f Exercise 10-1 Your answer is partially correct. Try again. Suppose the 2017 adidas financial statements contain the following selected data (in millions) Current assets Total assets Current liabilities Total liabilities Cash lem 10-8A $4,590 Interest expense $150 100 270 Score Resu 8,970 Income taxes 2,890 Net income 5,194 750 Compute the following values (a) Working capital. (b) Current ratio. (Round to 2 decimal places, e.g. 6.25:1.) (c) Debt to assets ratio. (Round to O'decimal places, e.g. 62%.) 1700 millions .9:1 times (d) Times interest earned. (Round to 2 decimal places, e.g. 6.25.) Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT INTERACTIVE TUTORIAL

Explanation / Answer

Times Interest Earned = Income Before Interest and Taxes / Interest Expense

= (Net Income + Income Taxes + Interest Expenses ) / Interest Expenses

= ( $ 270 + $ 100 + $ 150) / $ 150

= 3.47 times

Hence the correct answer is 3.47 times

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