Creditors Are Interested in the Times Interest Earned Ratio Because

question 54

Multiple Choice

Creditors are interested in the times interest earned ratio because they want to

• A) know what rate of interest the corporation is paying
• B) have adequate protection against a potential drop in earnings jeopardizing their interest payments
• C) be sure their debt is backed by collateral
• D) know the tax effect of lending to a corporation

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Definitions:

ATMs

Automated Teller Machines, devices that allow bank customers to perform financial transactions without the need for a branch representative.

Bank Tellers

Employees of a bank who deal directly with customers, handling transactions, cash checks, accept deposits, and provide account information.

Bank Branches

Physical locations of a bank where customers can perform various financial transactions, such as deposits, withdrawals, loan applications, and account inquiries.

Employment

The condition of having paid work or the number of people who are currently employed in the economy.