If a Firm's Cash Coverage Ratio Is Greater Than Its

question 7

Multiple Choice

If a firm's cash coverage ratio is greater than its times interest earned ratio, then:

• A)The firm's assets are not fully depreciated
• B)The firm has no lease obligations
• C)The firm has very little long-term debt
• D)The firm has a high degree of liquidity

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Definitions:

Aging the Receivables

The process of categorizing accounts receivable according to the length of time an invoice has been outstanding.

Due Date

The specified date by which a payment, assignment, or task is required to be completed or submitted.

Age Groupings

Classification of data or people into groups based on their age.

Interest Revenue

Income earned from lending funds or investing in interest-bearing financial instruments.