The Larger the Times Interest Earned Ratio,the Greater the Risk

question 89

True/False

The larger the times interest earned ratio,the greater the risk a company incurs.

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Definitions:

JIT Processing

Just-In-Time (JIT) processing is a management strategy that aligns raw-material orders from suppliers directly with production schedules to reduce inventory costs.

Inventories

Assets held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials or supplies to be consumed in the production process or in the rendering of services.

"Push" Approach

A marketing strategy where products are "pushed" through distribution channels to the consumers, typically involving significant promotion and sales efforts.

Process Cost System

An accounting method used to track costs in environments where goods are produced in continuous processes, such as refineries and manufacturing plants.