Calculating the times interest earned ratio using EBITDA is more conservative than using EBIT because it takes the cost of replacing fixed assets into consideration.

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The statement in the question is incorrect. Calculating the times interest earned ratio using EBITDA is actually less conservative than using EBIT because it adds back depreciation and amortization expenses, which are non-cash expenses, to earnings. Therefore, the resulting ratio may overstate the company's ability to meet interest payments. Using EBIT, on the other hand, provides a more conservative measure of a company's ability to pay interest as it does not add back these non-cash expenses.

Calculating the Times Interest Earned Ratio Using EBITDA Is More