Quiz Ch 04 – Interpretation of a Times Interest Earned Ratio of 5
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
What does a times interest earned ratio of 5 imply for the firm?
What does a times interest earned ratio of 5 imply for the firm?
How should a total debt ratio of 0.35 be understood?
How can an asset turnover ratio of 1.75 be understood?
How will the long-term debt ratio change if Jay’s Jams Inc. chooses to lease stereo equipment on a long-term basis instead of borrowing money from a bank to purchase it?
Which metric is considered the least reliable for assessing operating performance?
What are some drawbacks of the standard measures of liquidity?
What is known as the acid-test ratio?
What does it indicate if the cash coverage ratio surpasses the times interest earned ratio?
True or false: An increase in average accounts receivable boosts a firm’s return on assets, all else being equal.
True or false: The conversion of bonds into equity by bondholders leads to increased interest earned.