The Ratio That Indicates If a Borrowing Company Will Be

question 70

Multiple Choice

The ratio that indicates if a borrowing company will be able to meet its required interest payments is the

• A) Current ratio
• B) Debt-to-equity ratio
• C) Price-earnings ratio
• D) Times interest earned ratio

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Definitions:

Confidence Interval

An interval estimate around a sample mean within which an unknown population mean is expected to lie, at a certain confidence level.

Population Mean

The average of a set of characteristics, quantities, or values for all individuals or items in a defined population.

Population Variance

A measure of how data points in a population are spread out from the mean.

T Distribution

A type of probability distribution that is symmetrical and bell-shaped like the normal distribution but has heavier tails, used especially for small sample sizes.