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The Times-Interest-Earned Ratio Is Calculated by Dividing Operating Income by Operating

question 74

True/False

The times-interest-earned ratio is calculated by dividing operating income by operating expenses.


Definitions:

Bond's Principal

The face value of a bond, or the amount that the bond issuer agrees to repay the bondholder at the bond's maturity date.

Bank Interest

The amount paid to depositors for holding their money in a bank account, or the amount charged to borrowers for taking out a loan.

Annual Payments

Recurring payments made once a year, often related to loans, insurance premiums, or obligations.

Term Loan

A loan from a bank for a specific amount that has a specified repayment schedule and a fixed or floating interest rate.

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