Question $37$

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$7$an $-$ What is the primary purpose of the times interest earned ratio in financial statement analysis?

$$ a$.$ To measure how effectively an entity is generating earnings before interest and tax to cover its interest obligations.

b$.$ To establish the entity's capacity to pay dividends to its shareholders.

c$.$ To determine the speed at which a company can increase its revenue.

d$.$ To assess the number of times an entity's assets cover its shareholder investments.

e$.$ To calculate the proportion of liquid assets available to cover immediate liabilities.