The Cash Debt Coverage Ratio Is Computed by Dividing Net

question 56

Multiple Choice

The cash debt coverage ratio is computed by dividing net cash provided by operating activities by

• A)average long-term liabilities.
• B)average total liabilities.
• C)ending long-term liabilities.
• D)ending total liabilities.

---

Definitions:

Taxable Income

The sum of earnings that determines the tax liability of a person or business to the government, once all deductions and exemptions have been applied.

Charitable Contribution

A donation or gift to a non-profit organization or charity that is often tax deductible for the donor.

Net Income

The amount of money left after all expenses, taxes, and deductions have been subtracted from a company's total revenue.

Separately Stated Items

Items on a partnership or S corporation tax return that are passed through to the owners or shareholders separately from ordinary income.