The Times-Interest-Earned Ratio Is a Measure of Ability to Cover

question 186

True/False

The times-interest-earned ratio is a measure of ability to cover debt.

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Definitions:

Rate Of Return

The accumulation or declination in an investment's value over an agreed period, indicated as a percentage of the investment’s beginning price.

Coupon Bond

A bond that pays the holder a fixed interest payment (coupon) at regular intervals until maturity, when the principal amount is reimbursed.

Accrued Interest

Interest that has been earned but not yet received or paid out, often relevant in bond investments and loans.

Interest Days

Refers to the days over which interest is calculated on a loan or financial instrument.