1. Which company has a higher reliance on debt to support operations: Company A with a debt ratio of 0.2, or Company B with a debt ratio of 0.7? 2. What is the times interest earned ratio if a...

1. Which company has a higher reliance on debt to support operations: Company A with a debt ratio of 0.2, or Company B with a debt ratio of 0.7?

2. What is the times interest earned ratio if a company’s EBIT is $2,700,000 and the total interest payments are $750,000? Should the company be able to cover its debt?