A Times Interest Earned Ratio of 11 Means That the Company's

question 22

Multiple Choice

A times interest earned ratio of 11 means that the company's:

• A)net income is large enough to pay interest and taxes 11 times.
• B)net cash flow from operations before taxes and interest is large enough to pay interest 11 times.
• C)net cash flow from operations is large enough to pay interest and taxes 11 times.
• D)net income before taxes and interest is large enough to pay interest 11 times.

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Definitions:

Buyers

Individuals or entities that purchase goods or services.

Downward Pressure

Forces that cause the value or price of something to decrease.

Reverse Auction

A type of auction in which the roles of buyer and seller are reversed, with sellers competing to obtain business from the buyer by offering the lowest price for their goods or services.

Bid Prices

The highest price that a buyer is willing to pay for a good, security, or commodity in a trading context.