Which of the Following Is True of the Times-Interest Earned

question 42

Multiple Choice

Which of the following is true of the times-interest earned (TIE) ratio of a firm?

• A) The lower the TIE ratio, the higher the probability that the firm will default on its debt.
• B) The TIE ratio is calculated by dividing net income by interest charges.
• C) The TIE ratio increases if the debt/assets ratio increases and vice versa.
• D) The TIE ratio is always more than 1.
• E) The TIE ratio shows the effects of both operating leverage and financial leverage.

Differentiate between various forms of organizational control and their implications.

Assess the significance of control in contemporary organizational settings.

Understand the evolution of employee autonomy and control mechanisms in response to shifts in societal values and workplace dynamics.

Examine the relationship between workplace identity, personal autonomy, and control.

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Definitions:

Inventory Cost

The total cost associated with holding and managing inventory, including costs of storage, insurance, deterioration, and obsolescence.

Gross Profit

The profit a company makes after deducting the costs associated with making and selling its products or the costs associated with providing its services.

FIFO

"First-In, First-Out," an inventory valuation method where the cost of goods sold is based on the oldest inventory items.

Lower Of Cost

Lower of Cost or Market (LCM) is an accounting principle that values inventory at the lower of its historical cost or current market value.