A Cash Coverage Ratio of Less Than One Indicates

question 111

Multiple Choice

A cash coverage ratio of less than one indicates:

• A) the firm does not have enough cash to make its interest payments.
• B) the firm does have enough cash to make its interest payments, but not its lease obligations.
• C) the firm has too little depreciation expense.
• D) earnings need to fall by only a small amount before interest obligations cannot be covered.

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Definitions:

Taft-Hartley Act

A 1947 U.S. federal law that restricts the activities and power of labor unions.

Secret-Ballot Elections

A voting method in which voters' choices are confidential to ensure free and fair selection, often used in union representation elections.

Union Security Arrangement

A provision in a collective bargaining agreement that ensures the stability and support of the union through various means, such as requiring union membership or dues payment from workers.

Agency Shop

A form of a union security agreement where employees do not have to join the union but must still pay dues as if they were members.