The higher the times interest earned ratio, the more comfortable are a company's creditors in the ability of the company to meet its interest obligations.

Question

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The higher the times interest earned ratio (also known as interest coverage ratio), the more easily a company can cover its interest payments from its earnings. This makes the company less risky for its creditors, who are therefore more comfortable in the company's ability to meet its debt obligations.

The Higher the Times Interest Earned Ratio, the More Comfortable