An important aspect of the firm's reorganization plan is the recapitalization of the firm's capital structure. The goal of restructuring the firm's debt includes all of the following EXCEPT

Question

Quizplus · Accepted Answer

Decreasing the times interest earned ratio is not a goal of restructuring the firm's debt. The times interest earned ratio measures a company's ability to pay its interest expenses on its outstanding debt. As such, a higher times interest earned ratio is generally seen as positive, as it indicates the company has more than enough earnings to cover its interest obligations. Therefore, the goal of the firm's reorganization plan would be to increase the times interest earned ratio, not decrease it.

An Important Aspect of the Firm's Reorganization Plan Is the Recapitalization