Suppose We Calculate a Times Interest Earned Ratio of 29

question 109

Multiple Choice

Suppose we calculate a times interest earned ratio of 29 for Colgate-Palmolive. We can conclude

• A) Colgate-Palmolive may experience some difficulty meeting it's interest payments.
• B) Colgate-Palmolive is very unlikely to have difficulty meeting it's interest payments.
• C) Colgate-Palmolive has $29 of operating cash flow for every dollar of interest expense.
• D) Colgate-Palmolive's EBITDA is 29 times larger than its interest expense.

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Definitions:

Engulf

To surround or envelop completely, often used to describe how one cell can consume another.

Terrestrial Mollusks

Mollusks that live on land rather than in the sea or freshwater bodies; this group includes snails and slugs.

Gastropods

A class of mollusks typically having a one-piece coiled shell and including snails, slugs, and whelks, which are primarily marine, but also found in freshwater and terrestrial environments.

Gastrovascular Cavity

A central cavity in certain simple organisms, such as cnidarians, serving both digestive and circulatory functions.