The higher the times interest earned ratio, the better the creditors' protection.

Name: The higher the times interest earned ratio, the better the creditors' protection.
Brand: Quizplus
Rating: 4.8 (32 reviews)

Question

Quizplus · Accepted Answer

A higher times interest earned ratio indicates that the company has enough earnings to cover its interest payments, which is a positive sign for creditors as it means they are more likely to receive their payments on time. Therefore, a higher ratio provides better protection for creditors.

The Higher the Times Interest Earned Ratio, the Better the Creditors