To Determine the Ability of a Company to Pay Interest

question 12

Multiple Choice

To determine the ability of a company to pay interest on its debt, you would calculate the:

• A)debt ratio.
• B)interest coverage ratio.
• C)price-earnings ratio.
• D)return on assets ratio.

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Definitions:

Bases

Substances that accept protons according to the Brønsted-Lowry definition or donate electrons in the Lewis definition, commonly displaying a pH greater than 7.

Buffers

Substances that minimize changes in the pH of a solution when an acid or base is added to it, helping to maintain stability in biological systems.

α-Helix

A common motif in the secondary structure of proteins, characterized by a right-handed coiled or spiral shape, where the amino acid residues are arranged in a helical structure.

Secondary

Pertaining to a secondary stage or level, implying it follows a primary stage and usually is dependent on or results from it.