The times interest earned ratio shows how many times a company can pay off its debt charges with its earnings. If a company has a ratio between 0.90 and 1, it means that its earnings are not able to pay off its
The times interest earned ratio is also somewhat biased towards larger, more established companies in safer sectors due to credit terms and interest rates. Imagine two companies that earn the same amount of revenue and carry the same amount of debt. One company's debt may b...