When the times interest earned ratio falls below 1.5,the default rate on liabilities increases sharply.

Name: When the times interest earned ratio falls below 1.5,the default rate on liabilities increases sharply.
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A times interest earned ratio below 1.5 indicates a company may have difficulty meeting interest payments, which often leads to a higher default rate on liabilities as the company struggles to manage its debt obligations.

When the Times Interest Earned Ratio Falls Below 1