Debt Covenants Include All of the Following Except ________

question 13

Multiple Choice

Debt covenants include all of the following except ________.

• A) restrictions for holding compensating balances of cash
• B) restrictions on purchase of supplies
• C) maintaining set ratios or working capital values
• D) restrictions on future borrowings

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Definitions:

Trend Analysis

An analysis of a firm’s financial ratios over time. It is used to estimate the likelihood of improvement or deterioration in its financial situation.

Analyzing

The process of examining data, documents, or operations to understand patterns, identify trends, and derive meaningful insights.

Ratios

Financial metrics used to make comparisons between different aspects of a company's performance or financial position, to assess its health, efficiency, and profitability.

Basic Earning Power Ratio

A financial metric that indicates how well a company's assets are generating income before the effects of taxes and financing costs.