Which of the following statements concerning a firm's times-interest earned (TIE) ratio is correct?
A. Generally the lower its TIE ratio, the higher the probability that the firm will default on its debt.
B. The TIE ratio is calculated by dividing net income by interest charges.
C. The TIE ratio increases if the debt/assets ratio increases, and vice versa.
D. The TIE ratio is always greater than 1.
E. The TIE ratio shows the effects of both operating leverage and financial leverage.
Answer: A
You might also like to view...
A(n) ______ is an employee who leaves their home country to go work in another country.
A. parochial B. ethnocentric C. expatriate D. BRIC
In preparing a company's statement of cash flows for the year just ended, the following information is available: Loss on the sale of equipment$14,000Purchase of equipment 225,000Proceeds from the sale of equipment 106,000Repayment of outstanding bonds 87,000Purchase of treasury stock 25,000Issuance of common stock 96,000Purchase of land 115,000Increase in accounts receivable during the year 33,000Decrease in accounts payable during the year 75,000Payment of cash dividends 35,000Net cash flows from financing activities for the year were:
A. $340,000 of net cash used. B. $147,000 of net cash used. C. $26,000 of net cash used. D. $51,000 of net cash used. E. $347,000 of net cash used.
________ is an example of a nontechnology communication selling activity.
A. Identifying and targeting key customer accounts B. Enhancing language and overall communication skills C. Developing database management skills D. Leaving voice-mail messages E. Creating useful company web page content
Solvency measures a company's ability:
A) to meet long-term obligations as they become due. B) to meet short-term obligations as they become due. C) to make a profit in the short-run. D) to make a profit in the long-run.