Which Financial Ratio Is a Measure of the Ability of the Company

question 4

Multiple Choice

Which financial ratio is a measure of the ability of the company to meet all of its fixed-charge obligations?

• A) debt to asset ratio
• B) debt to equity ratio
• C) times interest earned
• D) long-term debt to capital structure
• E) coverage of fixed charges

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Definitions:

Cost Function

A mathematical representation of how a firm's costs change with different levels of output, typically showing the relationship between costs and output quantity.

Average Age

A statistic that represents the mean age of a group of individuals or objects.

Learning by Doing

The process where productivity is increased through practice, self-perfection, and minor innovations.

Cost-Output Elasticity

A measure of how responsive the total cost of production is to changes in the quantity of output produced.