If the Cash Coverage Ratio Exceeds the Times Interest Earned

question 51

Multiple Choice

If the cash coverage ratio exceeds the times interest earned ratio,then the firm has:

• A) a positive cash flow.
• B) depreciable assets.
• C) no long-term debt.
• D) short-term debts.

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Definitions:

Voting Common Shares

Shares of common stock that provide the shareholder with the right to vote on corporate matters.

Net Income

The total profit of a company after all revenues, costs, and expenses have been deducted, also known as the bottom line.

Long-Term Investments

Assets that a company intends to hold for more than one year, such as stocks, bonds, real estate, or other financial instruments.