How Do Rules Fit into the Concept of "Who Gets

question 10

Multiple Choice

How do rules fit into the concept of "who gets what,and how"?

• A) Rules can be thought of as the "what."
• B) Rules are not relevant.
• C) Rules can be thought of as the "who."
• D) Rules define the "getting."
• E) Rules can be thought of as the "how."

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.

EBITDA Coverage Ratio

Similar to the times-interest-earned ratio, but it recognizes that many firms lease assets and also must make sinking fund payments. It is found by adding earnings before interest, taxes, depreciation, and amortization and lease payments, then dividing this total by interest charges, lease payments, and sinking fund payments over 1 minus the tax rate.

TIE

Times Interest Earned, a financial metric indicating how well a company can meet its interest obligations based on current earnings.

DSO

Days Sales Outstanding, a measure of the average number of days that a company takes to collect payment after a sale has been made.