A customer of your company has a times interest earned ratio of 23.25. This means that for every dollar of interest expense, the customer had $23.25 of income available to pay interest and taxes.

Question

Quizplus · Accepted Answer

The times interest earned ratio is a measure of a company's ability to meet its interest payments. A ratio of 23.25 means that the company has $23.25 of income available to pay interest and taxes for every dollar of interest expense. This is a good ratio, as it indicates that the company has a strong ability to meet its debt obligations.

A Customer of Your Company Has a Times Interest Earned