Halverson's Times Interest Earned Ratio Was 2

question 109

Multiple Choice

Halverson's times interest earned ratio was 2.98 in 2019,2.79 in 2018,and 2.31 in 2017.Which of the following statements about the ratio is correct?

• A)The increasing ratio indicates decreasing levels of debt on which interest is incurred.
• B)The increasing ratio indicates the strategy of pursuing growth by investment in other companies,which has increased debt,but Halverson's profits have not yet increased from those investments.
• C)The increasing ratio implies increased long-term debt financing.
• D)The increasing ratio would be considered by creditors to be an indicator of higher risk.

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