Data from Lheureux Corporation's most recent balance sheet and the company's income statement appear below: Year 2Year 1Total assets$1,440 $1,480 Total liabilities$400 $450 Total stockholders' equity$1,040 $1,030 Income StatementFor the Year Ended December 31, Year 2(in thousands of dollars)Sales (all on account)$1,280 Cost of goods sold 850 Gross margin 430 Selling and administrative expense 355 Net operating income 75 Interest expense 18 Net income before taxes 57 Income taxes (30%) 17 Net income$ 40 The times interest earned ratio for Year 2 is closest to:
A. 4.17
B. 5.95
C. 2.22
D. 3.17
Answer: A
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