The Times Interest Earned Ratio Indicates

question 26

Multiple Choice

The times interest earned ratio indicates

• A)the margin of safety provided to creditors.
• B)the extent of "trading on the equity" or financial leverage.
• C)profitability without regard to how resources are financed.
• D)the effectiveness of employing resources provided by owners.

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Definitions:

Protective Tariff

A levy placed on foreign goods to safeguard local industries by increasing the cost of imports, hence reducing their attractiveness compared to domestic products.

Imported Wine

Wine that is brought into a country from another country, typically for retail and consumption within the importing country.

Exchange Rates

The price of one currency in terms of another for conversion purposes.

National Governments

The organization that leads a country, making and enforcing laws, and managing public resources and services.