What Are Formal and Actual Parameters

question 13

Essay

What are formal and actual parameters?

---

Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating short-term financial health and operational efficiency.

Current Ratio

A liquidity ratio that measures a company's ability to cover its short-term obligations with its current assets.

Times Interest Earned

A ratio that assesses the risk that bondholders will not receive their interest payments or that interest payments will not be made if earnings decrease. The ratio is computed as income before income tax expense plus interest expense divided by interest expense.

Interest Expense

The cost incurred by an entity for borrowed funds, often reflected as a line item on the income statement.