Calculate the Times Interest Earned Ratio for Paige's Purses, Inc

Calculate the times interest earned ratio for Paige's Purses, Inc. using the following information: sales = $50,000,000, cost of goods sold = $15,000,000, depreciation expense = $2,000,000, addition to retained earnings = $10,000,000, dividends per share = $1.10, tax rate = 30 percent, and number of shares of common stock outstanding = 10,000,000. Paige's Purses has no preferred stock outstanding.

A) 0.27
B) 3.30
C) 11.00
D) 16.67

Correct Answer:

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