The Ratio That Measures the Number of Times That Operating

question 118

Multiple Choice

The ratio that measures the number of times that operating income can cover interest expense is the:

• A)debt ratio.
• B)times-interest-earned ratio.
• C)current installment of long-term debt.
• D)interest ratio.

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Definitions:

Year 2

Refers to the second year of a specified time frame, often used in financial and academic contexts.

Accounts Receivable Turnover

A measure of how quickly a company collects cash from its credit sales.

Inventory Turnover

A ratio indicating how many times a company's inventory is sold and replaced over a specific period.

Year 2

A term that indicates the second year in a series, often used in financial and operational planning to distinguish between different time periods.