Which Financial Ratio Indicates the Ability of the Company to Meet

question 95

Multiple Choice

Which financial ratio indicates the ability of the company to meet its annual interest costs?

• A) debt to asset ratio
• B) debt to equity ratio
• C) times interest earned
• D) long-term debt to capital structure
• E) coverage of fixed charges

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Definitions:

Periodic Tenancy

A leasing agreement that continues for successive periods (such as month-to-month or year-to-year) until either the tenant or landlord gives notice to terminate.

Tenancy at Will

A rental agreement that either party can terminate at any time without cause, provided proper notice is given.

Implied Warranty

An unwritten and unexpressed guarantee that a product or service complies with the standard quality and performance expected.

Habitability

The suitability of a building for living in, ensuring that it is safe, healthy, and fit for habitation.