Asked by Brenda Levina on Jul 06, 2024

verifed

Verified

Times interest earned is also called the

A) money multiplier.
B) interest coverage ratio.
C) coupon coverage ratio.
D) premium ratio.

Times Interest Earned

A financial ratio that measures a company's ability to meet its interest payments with its earnings before interest and taxes.

Interest Coverage Ratio

A financial metric that measures a company's ability to pay interest on its outstanding debt with its operating income.

Money Multiplier

A concept in monetary economics that describes the maximum amount of money the banking system can theoretically generate with each unit of central bank money.

  • Learn how to evaluate a company's debt management efficiency using the times interest earned ratio.
verifed

Verified Answer

CB
Cesar BarabdaJul 08, 2024
Final Answer :
B
Explanation :
Times interest earned is also known as the interest coverage ratio. This ratio is used to determine a company's ability to pay its interest expenses on outstanding debt.