Answer: d.have adequate protection against a potential drop in earnings jeopardizing their interest payments
Step-by-step explanation:
The Times Interest Earned Ratio is a measure that allows for the analysis of if a company can keep up it's debt payments.
It is calculated by dividing the Earnings before Interest and Tax by the Interest Expense of the debt.
The higher the number, the better because it means that they can keep up debt payments several times over.
As Debtors therefore, this figure is important because missing a debt payment is very bad for credit ratings and this matrix helps them realise if they can keep paying for debt even if their Earnings drop.