A Bank Wants to Examine the Adequacy of a Business

question 82

Multiple Choice

A bank wants to examine the adequacy of a business customer's earnings based on the coverage ratios.They are most likely to look at which of the following ratios?

• A)Wages and salaries/Net sales
• B)Accounts receivables/(Annual credit sales/360)
• C)Net income after taxes/Net sales
• D)Income before interest and taxes/Interest payments
• E)(Current assets - Inventory)/Current liabilities

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