The times-interest-earned ratios of four companies are given below: $$\begin{array} { | l | r | }
\hline \text { Forge Corp. } & 8.9 \
\hline \text { Fellow Inc. } & 9.2 \
\hline \text { Stacy Corp. } & 6.7 \
\hline \text { Bennett Inc. } & 13.5 \
\hline
\end{array}$$ Which of the above companies have the highest debt-paying ability?
A) Forge Corp.
B) Fellow Inc.
C) Stacy Corp.
D) Bennett Inc.

Question

The times-interest-earned ratios of four companies are given below: $$\begin{array} { | l | r | } 
\hline \text { Forge Corp. } & 8.9 \
\hline \text { Fellow Inc. } & 9.2 \
\hline \text { Stacy Corp. } & 6.7 \
\hline \text { Bennett Inc. } & 13.5 \
\hline
\end{array}$$ Which of the above companies have the highest debt-paying ability?
A) Forge Corp.
B) Fellow Inc.
C) Stacy Corp.
D) Bennett Inc.

Quizplus · Accepted Answer

The higher the times-interest-earned ratio, the greater the company's ability to meet its interest payments on debt. Therefore, Bennett Inc. with a ratio of 13.5 has the highest debt-paying ability among the listed companies.

The Times-Interest-Earned Ratios of Four Companies Are Given Below Which of the Above Companies Have the Highest Debt-Paying Ability