A Times Interest Earned Ratio of 0

question 40

Multiple Choice

A times interest earned ratio of 0.90 to 1 means:

• A)that the firm will default on its interest payment.
• B)that net income is less than the interest expense.
• C)that the cash flow is less than the net income.
• D)that the cash flow exceeds the net income.
• E)none of the answers are correct.