In general,a low times interest earned ratio and a low fixed-payment coverage ratio are associated with a high degree of financial leverage.

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A low times interest earned ratio (or interest coverage ratio) indicates that a company is not generating enough earnings to cover its interest expense, which suggests high financial leverage. A low fixed-payment coverage ratio means that a company has less ability to cover fixed payments (including interest) with its earnings, indicating again high financial leverage. Therefore, both ratios are associated with a high degree of financial leverage.

In General,a Low Times Interest Earned Ratio and a Low