Which financial ratio measures a company's ability to service its interest commitments?

Question

Quizplus · Accepted Answer

Interest cover, also known as the interest coverage ratio or times interest earned, is a financial ratio that measures a company's ability to service its interest commitments from its earnings before interest and taxes (EBIT). A higher interest cover ratio indicates that the company is more capable of servicing its interest payments and is considered a positive factor for creditors and investors.

Which Financial Ratio Measures a Company's Ability to Service Its