Which of the Following Statements About the Times-Interest-Earned Ratio Is

question 71

Multiple Choice

Which of the following statements about the times-interest-earned ratio is TRUE?

• A) A lower ratio indicates a higher debt paying ability.
• B) Debt reduction leads to an increase in interest expense.
• C) The times-interest-earned ratio is also called the interest-coverage ratio.
• D) The times-interest-earned ratio is calculated by dividing gross income by interest expense.

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Definitions:

Homogenizing Effects

The process by which diverse elements are made uniform or similar, often observed in cultures, markets, and technologies.

Dependency

A situation in which a person or group relies on another for support, often creating a power imbalance and vulnerability.

Colonialism

A practice or system in which a country asserts control over a foreign territory, exploiting it economically and often imposing its own cultural and political structures.

Globalization

Globalization is the process by which businesses, cultures, and societies become more interconnected and interdependent through international trade, communication, and technology.