The Fixed Charge Coverage Ratio Includes All of the Following

question 14

Multiple Choice

The fixed charge coverage ratio includes all of the following except in the denominator.

• A)lease payments
• B)preferred dividends before tax
• C)before tax sinking fund
• D)common stock dividends

Understand the factors affecting the return on common shareholders' equity, including leverage and debt ratios.

Assess the limitations of comparing basic earnings per share across companies and industries.

Analyze financial statements using horizontal analysis, including the calculation of changes over periods.

Conduct intracompany, intercompany, and industry comparisons of financial data to evaluate company performance.

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Definitions:

S&P 500 Index

A market-capitalization-weighted index of the 500 largest U.S. publicly traded companies and is considered one of the best representations of the U.S. stock market.

Sharpe Measure

A metric for calculating risk-adjusted return, measuring excess return per unit of deviation in an investment.

S&P 500 Index

A stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States, often used as a gauge of the overall health of the US stock market.

Sharpe Measure

A metric used to assess the risk-adjusted return of an investment, comparing its excess returns to the volatility experienced.