One ratio calculation doesnt offer much information on its own. The Interpretation of Financial Statements. Times Interest Earned Ratio Debt To Total Assets Ratio Analyzing Long Term Debt Youtube The ideal debt to equity ratio will help management to make expansion decisions for further growth of business and increase its share in the market by adding more units or operations. . In this case since the debt service coverage ratio of the company is greater than 1 it shows that the company is having the cash equivalent to the 9 times of the amount which is required in order to meet its debt obligations that is due. EBIT is sometimes called Operating Income. Compare the times interest earned ratio formula shown below with the formula for the fixed-charge coverage ratio as shown. Use of PE ratio. The interest coverage ratio measures the ability of a company to pay the interest on its outstanding debt. Could be considered a solv