The times-interest-earned ratio is one, but not the only, indication of a firm's ability to meet its long-term and short-term debt obligations.

Question

Quizplus · Accepted Answer

This statement is true. While the times-interest-earned ratio is an important indicator, other factors such as cash flow, profitability, and overall financial health should also be considered when evaluating a firm's ability to meet its debt obligations.

The Times-Interest-Earned Ratio Is One, but Not the Only, Indication