Select the ratio that each statement below most properly satisfies.
-An income statement measure of the ability of a company to make its interest payments
A)Dividend yield ratio
B)Cash flow from operations to capital expenditures ratio
C)Debt service coverage ratio
D)Return on common stockholders' equity ratio
E)Times interest earned ratio
F)Asset turnover ratio
G)Debt-to-equity ratio
H)Dividend payout ratio
I)Price/earnings ratio

Question

Quizplus · Accepted Answer

The statement describes a company's ability to pay its interest expenses, which can be measured by the Times Interest Earned (TIE) ratio. This ratio measures a company's ability to meet its interest payments by comparing its income to its interest expenses. A higher TIE ratio indicates a company is better able to meet its interest obligations.

Select the Ratio That Each Statement Below Most Properly Satisfies