The Fixed Charge Coverage Ratio Recognizes That Firms Often Lease

question 90

True/False

The fixed charge coverage ratio recognizes that firms often lease equipment under contract and thus, some firms must meet more than just their scheduled interest payments out of earnings. Therefore, the fixed charge coverage is more inclusive than the TIE ratio.

---

Definitions:

Confidence Level

The probability that a statistical result is not due to chance, often expressed as a percentage.

Accuracy Level

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or standard.

Sample Size

The number of observations or individuals taken from a population for the purpose of statistical analysis.

Sample Proportion

The sample proportion is a statistic that estimates the proportion of elements in a sample that have a particular attribute, characteristic, or outcome.