The Times Interest Earned Ratio Measures

question 29

Multiple Choice

The times interest earned ratio measures:

• A) The relationship between assets and liabilities.
• B) A company's ability to pay interest even if sales decline.
• C) The relationship between income and debt.
• D) A firm's ability to pay its bills on time.
• E) A company's profitability.

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Definitions:

Direct Index Approach

A method used in finance to directly compare the performance of various investments or securities to a specific market index.

Results Based-Format

an approach focusing on outcomes and results in the context of performance assessments or project management.

Rater Bias

A tendency for evaluators to make subjective and potentially inaccurate assessments due to personal prejudices or preferences.

Graphics Rating Scale

A method used in performance appraisal that evaluates employees' performance on a continuum, often illustrated by a line or bar.