Which Financial Ratio Is a Measure of the Ability of the Company

question 4

Multiple Choice

Which financial ratio is a measure of the ability of the company to meet all of its fixed-charge obligations?

• 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:

Contextual Cues

Environmental or situational indicators that help to interpret behaviors, events, or concepts within a specific context.

Narratives Interpretation

involves the analysis and understanding of the underlying meanings and implications of stories or accounts of events.

Chronological Order

The arrangement of events in the sequence of their occurrence in time.

Shared Knowledge

Information, beliefs, or cultural practices that are common to a group, community, or society, facilitating social cohesion and cooperation.