If a fiRm Has Only Current Assets and No fiXed

question 3

True/False

If a firm has only current assets and no fixed assets of any kind, its times interest earned ratio must
exceed its cash coverage ratio.

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Definitions:

Total Current Assets

The sum of all assets that are expected to be converted into cash, sold, or consumed within one year or the normal operating cycle, whichever is longer.

Current Liabilities

A company's debts or obligations that are due to be paid to creditors within one year.

Competitive Advantage

A condition or circumstance that puts a company in a favorable or superior business position relative to its competitors.

Low-Cost Leadership

A strategy where a business aims to become the least costly producer in its industry while maintaining sufficient levels of quality.