One Way Analysts Measure the Ability of a Company to Meet

question 4

Short Answer

One way analysts measure the ability of a company to meet its obligations is to calculate the times interest earned ratio for any outstanding debt the company may have. How would a company with $100,000 of outstanding bonds paying 8.5% annually and income before interest and taxes of $50,000, calculate the interest coverage (accrual basis) ratio?
a.Income before interest and taxes divided by the interest expense.
b.Income before interest and taxes divided by carrying value of the bonds outstanding.
c.Income before interest and taxes divided by the face value on bonds.
d.Face value of the bonds divided by income before interest and taxes.

Define and exemplify contractual intent and its necessity for valid offer formation.

Understand the principles of offer, acceptance, and the formation of bilateral and unilateral contracts.

Identify the requirements for valid acceptance and the effects of various acceptance methods.

Comprehend the factors affecting the enforceability of agreements not in writing.

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Definitions:

Base-catalyzed Enolization

A chemical process in which a base catalyzes the conversion of a carbonyl compound to its enol form, usually as a key step in forming more reactive enolate ions.

Acetaldehyde

A volatile, colorless, and pungent compound used in the manufacture of acetic acid, perfumes, and flavors.

Enolate

An intermediate formed from an aldehyde or ketone in the presence of a strong base, characterized by the presence of a negatively charged oxygen atom adjacent to a carbon-carbon double bond.

1-pentene

A hydrocarbon with the formula C5H10, characterized by having a double bond between two of its carbon atoms, making it an alkene.