Which of the following will help an analyst determine how well a firm is able to meet its debt obligations?
A)Total liability turnover
B)Times-interest-earned
C)Return on debt
D)Asset ratio

Question

Quizplus · Accepted Answer

Times-interest-earned is a financial ratio that measures a firm's ability to meet its interest payments on debt. It gives an indication of the safety margin the firm has for covering its debt obligations. A higher ratio indicates better ability to meet the obligations, while a lower ratio indicates a higher risk of default. Total liability turnover, return on debt, and asset ratio do not directly measure a firm's ability to meet its debt obligations.

Which of the Following Will Help an Analyst Determine How