Which Ratios Measure the Extent of a Firm's Financing with Debt

question 18

Multiple Choice

Which ratios measure the extent of a firm's financing with debt relative to equity and its ability to cover interest and fixed charges?

• A)Debt ratio and price-to-earnings ratio.
• B)Cash flow adequacy and fixed charge coverage.
• C)Days payable outstanding and gross profit margin.
• D)Cash interest coverage and average collection period.

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Definitions:

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale, leading to increased interconnectedness and interdependence of the world's economies, cultures, and populations.

Just War

A theory in ethics and political philosophy that aims to determine under what conditions war can be deemed morally justifiable.

Globalization

The method of connecting and merging among individuals, corporations, and nations globally, frequently propelled by global commerce and investment and facilitated by information technology.

Cultural Differentialism

The perspective that cultures are distinctly different from one another and should be evaluated on their own terms rather than through the lens of another culture.