Time interest earned measures the ability of a company to pay its debts. A better time interest earned indicates that a company has adequate cash after paying its debts. Time interest earned is determined by dividing earnings before interest and tax with interest expense. The company that has the strongest ability to pay interest expense using time interest earned.

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Chapter 11, Problem 19E

To determine

Concept Introduction: Time interest earned measures the ability of a company to pay its debts. A better time interest earned indicates that a company has adequate cash after paying its debts. Time interest earned is determined by dividing earnings before interest and tax with interest expense.

The company that has the strongest ability to pay interest expense using time interest earned.

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