Question

Which ratio measures the firm’s ability to pay current interest and lease payments? Multiple Choice Total...

Which ratio measures the firm’s ability to pay current interest and lease payments?

Multiple Choice

  • Total Assets turnover ratio

  • Time interest earned ratio

  • Debt ratio

  • Cash-flow-to-debt ratio

  • Current ratio

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The answer to this is 'time interest earned ratio'

This is because this ratio measures the ability of a company to honour its debt payments.

Why other options are incorrect

Asset turnover ratio analyses the ability of a company to use its assets to turn into revenues

Current ratio measuring the ratio of current assets and current liabilities

Debt ratio analyses the proportion of companies assets finances by debt

Cash flow to debt ratio measures the proportion of cash flow from operation to debt

I hope this helps you

Please press the like button

Took real efforts

Thanks & Regards

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Which following ratio measures a firm's ability to pay current liabilities? Select one: a. Both a...
Which following ratio measures a firm's ability to pay current liabilities? Select one: a. Both a and b b. Acid-test ratio c. None of these d. The Juniper Ratio e. Current Ratio
QUESTION 12 Interest costs do not equal the effective cost of bank liabilities because: reserve requirements...
QUESTION 12 Interest costs do not equal the effective cost of bank liabilities because: reserve requirements increase the effective costs. there be substantial processing costs. service charges may offset a portion of non-interest expense. all of the above. 1. and 3. 6 points    QUESTION 13 Which financial ratio measures a firm's ability to pay current interest and lease payments with current earnings? Fixed charge coverage ratio. Return on equity. Current ratio. Inventory turnover. Debt to total assets ratio.
Which of the following is an asset utilization ratio? Multiple Choice return on assets receivables turnover...
Which of the following is an asset utilization ratio? Multiple Choice return on assets receivables turnover return on equity current ratio quick ratio
37. Which of the following ratio is useful in assessing the liquidity (i.e., the ability of...
37. Which of the following ratio is useful in assessing the liquidity (i.e., the ability of a company to pay its current liabilities using current assets) of a company? Select one: a. debt ratio b. current ratio c. inventory turnover rate d. gross margin ratio
The Interest Coverage (or Times Interest Earned) Ratio This ratio indicates a business' ability to pay...
The Interest Coverage (or Times Interest Earned) Ratio This ratio indicates a business' ability to pay the interest on its debt. It is calculated: EBIT / Interest Expense which is easy to remember if you remember those two accounts on the income statement. EBIT is usually the line immediately before interest expense. The Preferred Dividend Coverage Ratio Like the Interest Coverage Ratio, this ratio indicates a business' ability to pay dividends to its preferred shareholders. It is calculated: Net Income...
A firm’s total current assets are 11.8% of total assets, the current ratio is 1.8, and...
A firm’s total current assets are 11.8% of total assets, the current ratio is 1.8, and the quick ratio is 1.35. What is the firm’s inventory, in % of assets? Round to the nearest 0.1%
Which ratio(s) measure the firm’s ability to meet its interest costs?
Which ratio(s) measure the firm’s ability to meet its interest costs?
The ability of a company to collect receivables is measured by which ratio?      A. Day's sales...
The ability of a company to collect receivables is measured by which ratio?      A. Day's sales in receivables      B. Inventory turnover ratio C. Current ratio       D. Acid-test ratio The ability of a company to sell inventory is measured by which of the following ratios?      A. Inventory turnover ratio      B. Current ratio C. Day's sales in receivables      D. Acid-test ratio A company's ability to pay liabilities with current assets is measured by which of the following ratios?      A. Inventory turnover ratio     ...
Red Snail Satellite Company has a total asset turnover ratio of 3.50x, net annual sales of...
Red Snail Satellite Company has a total asset turnover ratio of 3.50x, net annual sales of $25 million, and operating expenses of $11.25 million (including depreciation and amortization). On its current balance sheet and income statement, respectively, it reported total debt of $1.75 million, on which it pays 7% interest on its outstanding debt. To analyze a company’s financial leverage situation, you need to measure the firm’s debt management ratios. Based on the preceding information, what are the values for...
The Total Debt to Total Capital ratio is an effective type of debt management ratio because...
The Total Debt to Total Capital ratio is an effective type of debt management ratio because it gives an idea of A. how profitably the firm is operating and utilizing its assets. B. the firm’s ability to pay off debts that are maturing within a year. C. how the firm has financed its assets as well as the firm’s ability to repay its long-term debt. D. how efficiently the firm is using its assets.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT