The Times- Interest- Earned Ratio Measures the Number of Times

question 63

True/False

The times- interest- earned ratio measures the number of times that profit before interest and taxes can pay interest expense.

---

Definitions:

Asset Management Ratios

Financial metrics that evaluate how efficiently a company utilizes its assets to generate revenue.

Generate Sales

The act of creating revenue for a company or business entity through the selling of goods or services.

Financial Leverage

Utilization of debt to expand the potential profitability of an investment.

Times Interest Earned

A financial ratio that measures a company’s ability to meet its interest payments on outstanding debt.