When a Corporation Has a Loss from Continuing Operations, the Basic

question 79

Multiple Choice

When a corporation has a loss from continuing operations, the basic earnings per share is

• A)greater than the diluted earnings per share
• B)less than the diluted earnings per share
• C)equal to the diluted earnings per share
• D)not reported

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Definitions:

Times-Interest-Earned Ratio

A measure of a company's ability to honor its debt payments, calculated by dividing earnings before interest and taxes (EBIT) by interest expenses.

Equity Multiplier

A ratio of financial leverage that calculates the proportion of a company's assets funded by its shareholders' equity.

Total Assets Turnover Ratio

Measures the turnover of all the firm’s assets; it is calculated by dividing sales by total assets.

Debt Ratio

A financial ratio that measures the extent of a company’s or individual's leverage, calculated by dividing total liabilities by total assets.