________ is a measure that indicates a firm's ability to meet the annual interest obligations on its outstanding debt.
A)Times-interest-earned (TIE) ratio
B)Degree of operating leverage (DOL)
C)Debt/assets ratio
D)Dividend payout ratio
E)Current ratio

Question

________ is a measure that indicates a firm's ability to meet the annual interest obligations on its outstanding debt. 
A)Times-interest-earned (TIE) ratio
B)Degree of operating leverage (DOL)
C)Debt/assets ratio
D)Dividend payout ratio
E)Current ratio

Quizplus · Accepted Answer

The Times-interest-earned (TIE) ratio is designed to measure a company's ability to pay its interest obligations on outstanding debt. It calculates the ratio of a company's operating income to its interest expenses. A higher TIE ratio indicates that a company is better able to meet its annual interest obligations.

________ Is a Measure That Indicates a Firm's Ability to Meet