Which of the Following Statements Is Not True

question 120

Multiple Choice

Which of the following statements is not true?

• A) The times interest earned ratio gives an indication of a company's ability to meet interest payments as they come due.
• B) The times interest earned ratio is calculated by dividing the sum of net earnings, interest expense, and income tax expense, by interest expense.
• C) EBIT can be calculated by adding interest expense and income tax expense to net earnings.
• D) The higher a company's debt to total assets ratio, the lower the company's times interest earned ratio will be.

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Definitions:

Voluntary

Actions or decisions made based on one's free will or choice, not compelled by external forces.

Abstract Reasoning

The process of thinking about ideas and concepts that are not physically present, involving the ability to analyze and manipulate mental constructs.

Nervous System

The network of nerve cells and fibers that transmits nerve impulses between parts of the body, overseeing both voluntary actions and involuntary processes.

Sensory Stimulation

Exposure to stimuli that affects one of the five senses, used to enhance learning, healing, and general well-being.