The ratio that indicates if a borrowing company will be able to meet its required interest payments is the

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The times interest earned ratio, also known as the interest coverage ratio, is calculated by dividing the company's earnings before interest and taxes (EBIT) by its interest expense. This ratio indicates how many times over the company's earnings can cover its interest payments. A higher ratio suggests a greater ability to meet interest obligations, while a lower ratio indicates a higher risk of default.

The Ratio That Indicates If a Borrowing Company Will Be