What does times interest earned measure?
A)The ability of a company to make interest payments on its debt
B)The ability of a company to pay its interest-bearing debt obligations
C)The increase in interest expense as a result of new debt obligations acquired during the period
D)The average interest rate incurred on the company's debt

Question

Quizplus · Accepted Answer

Times interest earned measures a company's ability to make interest payments on its debt by comparing its earnings before interest and taxes (EBIT) to its interest expenses.

What Does Times Interest Earned Measure