Which ratio measures the number of dollars of operating earnings available to meet each dollar of interest obligations on the firm's debt?
A) fixed-charge coverage ratio
B) times interest earned
C) cash coverage ratio
D) ROA

Question

Quizplus · Accepted Answer

The times interest earned ratio measures the number of dollars of operating earnings available to meet each dollar of interest obligations on a firm's debt, indicating the firm's ability to cover its interest obligations with its earnings before interest and taxes (EBIT).

Which Ratio Measures the Number of Dollars of Operating Earnings