Which of the Following Statements Is Not True

question 46

Multiple Choice

Which of the following statements is not true?

• A) The times interest earned ratio gives an indication of a company's ability to meet interest payments as they come due.
• B) EBIT can be calculated by adding interest expense and income tax expense to net earnings.
• C) The times interest earned ratio is calculated by dividing the sum of net earnings, interest expense, and income tax expense, by interest expense.
• D) The higher a company's debt to total assets ratio, the lower the company's times interest earned ratio will be.

---

Definitions:

Reference

A source of information or a mention of a source, often used to substantiate claims or as a guide to further information.

Visionary Leadership

Leadership that brings to the situation a clear sense of the future and an understanding of how to get there.

Compelling Sense

An irresistible urge or an intense feeling that drives action.

Executive Success

A measure of the achievement and progress towards goals that an individual in an executive position realizes, often reflecting leadership effectiveness and company performance.