The Times Interest Earned Ratio Indicates

question 65

Multiple Choice

The times interest earned ratio indicates:

• A) The margin of safety provided to creditors.
• B) The extent of "trading on the equity" or financial leverage.
• C) Profitability without regard to how resources are financed.
• D) The effectiveness of employing resources provided by owners.

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Definitions:

Afferent Nerves

Also called sensory nerves; nerves that carry information about the external environment to the brain and spinal cord via sensory receptors.

Electrochemical Messages

The method by which neurons communicate with each other, involving electrical signals and chemical neurotransmitter substances.

Olfactory

This term relates to the sense of smell.

Efferent

Nerve fibers that convey impulses away from the central nervous system to effectors (muscles or glands), initiating action or movement.