times-interest-earned ratio is one, but not the only, indication of a firm's ability to meet its long-term and short-term debt obligations.

Question

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The times-interest-earned ratio measures a company's ability to cover its interest payments with its earnings. While it is an important indicator of a company's ability to meet its debt obligations, it is not the only factor that should be considered. Other factors such as cash flow, liquidity, and overall financial health should also be taken into account.

Times-Interest-Earned Ratio Is One, but Not the Only, Indication of a Firm's