When a company borrows more money how are the debt to equity and times interest earned ratios affected? Debt to Equity Times Interest Earned

Question

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When a company borrows more money, its debt to equity ratio increases because the total debt relative to equity rises. The times interest earned ratio decreases because the company now has higher interest obligations relative to its earnings before interest and taxes (EBIT), making it harder to cover interest expenses.

When a Company Borrows More Money How Are the Debt