A company's net income after tax was $400,000 for its most recent year. The company's income statement included?

The correct option is C)10

Earning before Interest & Taxes =400,000+160,000+40,000

                                                           =600,000

Times Interest earned                  = 60,000/600,000=10 times

What is the times interest earned for the companyis a6.7

Net Income after Tax              = $ 400,000

Add: Income Tax expense       = $ 140,000                

Add: Interest Expense            = $ 60,000

                                               -------------

Net income before interest and tax = $ 600,0000

Time interest earned for company = $ 600,000/ $ 60,000 = 10 times

Option (c) 10 .

Times Interes earned ratio = Earning before Interest & taxes / Interest Expense

= (Net Income + Tax Expense + Interes Expense) / Interest Expense

= ($400,000 + $140,000 + $60,000) / $60,000

= $600,000 / $60,000 =10

The time of interest earned for the company is 10

Interes cover ratio = Earning before Interest & taxes / Interest Expense

= (Net Income + Tax Expense + Interes Expense) / Interest Expense

= ($400,000 + $140,000 + $60,000) / $60,000

= $600,000 / $60,000 =10 times

Net Income after Tax = $ 400k

Add: Income Tax = $ 140k           

Add: Interest = $ 60k

Net income before interest and tax = $ 600k

Time interest earned for company = $ 60k/ $ 600k = 10 times

The correct answer is option C) 10 Times

Answer (c) 10

Net Income after Tax                          = $ 400,000

Add: Income Tax expense                  = $ 140,000                

Add: Interest Expense                         = $ 60,000                   

Net income before interest and tax = $ 600,0000

Time interest = $ 600,000/ $ 60,000 = 10 times

 .

the correct option is c.10

10 is the times interest earned for the company

Net Income after Tax              = $ 400,000

Add: Income Tax expense       = $ 140,000                

Add: Interest Expense            = $ 60,000

Net income before interest and tax = $ 600,0000

Time interest earned for company = $ 600,000/ $ 60,000 = 10 times

The times interest earned (TIE) ratio measures a company's ability to pay its interest expenses on its debt obligations. It is calculated by dividing the earnings before interest and taxes (EBIT) by the interest expense.

To calculate the TIE ratio for the company, we need to determine the EBIT:

1. Start with net income after tax: $400,000

2. Add back interest expense: $400,000 + $60,000 = $460,000

3. Add back income tax expense: $460,000 + $140,000 = $600,000

EBIT = $600,000

Now that we have determined the EBIT, we can calculate the TIE ratio:

TIE ratio = EBIT / Interest Expense = $600,000 / $60,000 = 10

So, the times interest earned for the company is 10, which means that the company is earning 10 times the amount of its interest expense. This indicates that the company is in a relatively strong financial position and is capable of paying its interest expenses on its debt obligations. A high TIE ratio is generally considered a positive sign for investors and creditors, as it suggests that the company is generating enough income to meet its debt obligations and that it has a lower risk of default.