The interest coverage ratio is defined by Interest Coverage $=$ EBITDA$/$Interest Expense. You are looking at a firm with an interest coverage of $6\mathrm{.}5$ and observe that other similar firms typically have an interest coverage of $5\mathrm{.}1.$ What does this say about the firm?

The interest coverage ratio is defined by Interest Coverage $=$ EBITDA$/$Interest Expense. You are looking at a firm with an interest coverage of $6\mathrm{.}5$ and observe that other similar firms typically have an interest coverage of $5\mathrm{.}1.$ What does this say about the firm?

The firm is more profitable than its peers.

The firm has more bankruptcy risk than its peers.

The firm has less bankruptcy risk than its peers.

The firm is less profitable than its peers.