If the times interest ratio:
A)Increases,then risk increases.
B)Increases,then risk decreases.
C)Is greater than 1.5,then the company is in default.
D)Is less than 1.5,the company is carrying too little debt.
E)Is greater than 1.5,the company is likely carrying too much debt.

Question

Quizplus · Accepted Answer

The times interest earned (TIE) ratio measures a company's ability to meet its debt obligations. An increase in the TIE ratio indicates that a company is more capable of covering its interest expenses, thus reducing financial risk.

If the Times Interest Ratio