Which Ratio Measures the Number of Dollars of Operating Cash

question 136

Multiple Choice

Which ratio measures the number of dollars of operating cash available to meet each dollar of interest and other fixed charges that the firm owes?

• A) times interest earned
• B) fixed-charge coverage ratio
• C) cash coverage ratio
• D) operating coverage ratio

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Definitions:

Agricultural Interests

Concerns or advantages related to the farming industry, including crop production, livestock management, and agricultural policy impacts.

Special-Interest Issue

An issue that generates substantial individual benefits to a small minority while imposing a small individual cost on many other citizens. In total, the net cost to the majority might either exceed or fall short of the net benefits to the special-interest group.

Crony Capitalism

A situation where the institutions of markets are maintained, but the allocation of resources, and the profit and loss of businesses, are determined by political decision-making rather than consumer purchases and market forces. To a large degree, the activities of business firms are directed and controlled by government spending and regulation. In turn, many of the business firms will use contributions and other forms of political support to compete for government favors.

Government Favors

Benefits or advantages granted by the government to specific groups, businesses, or individuals, potentially influencing market outcomes and competitiveness.