Even if a company has a low debt to total assets ratio, it may have difficulty paying interest on debt if it also has a low times interest earned ratio.

Name: Even if a company has a low debt to total assets ratio, it may have difficulty paying interest on debt if it also has a low times interest earned ratio.
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Question

Quizplus · Accepted Answer

A low times interest earned ratio indicates that a company may not be generating sufficient income to cover its interest expenses, regardless of its low debt to total assets ratio.

Even If a Company Has a Low Debt to Total