The higher, the value of ________ ratio, the better able a firm is to fulfill its interest obligations.
A) dividend payout
B) average collection period
C) times interest earned
D) average payment period

Question

Quizplus · Accepted Answer

Times interest earned ratio shows how many times a company can cover its interest payments with its earnings. The higher the times interest earned ratio, the more easily a company can pay its interest expenses. Therefore, a higher times interest earned ratio indicates a better ability of a firm to fulfill its interest obligations.

The Higher, the Value of ________ Ratio, the Better Able