The Interest Coverage Ratio Is Computed by Dividing

question 91

Multiple Choice

The interest coverage ratio is computed by dividing:

• A) Operating profit by annual interest expense.
• B) Profit by annual interest expense.
• C) Carrying value of bonds by cash interest payments.
• D) Earnings per share by the prime interest rate.

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Definitions:

Final Control Element

The Final Control Element in a control system is the device, such as a valve or actuator, that directly manipulates the physical process based on control signals.

Integral Action

A control action in which the controller output is proportional to the duration and magnitude of the error signal, commonly used in PID controllers.

Proportional Plus Derivative

A control method in feedback system design that uses a combination of the proportional and derivative actions to improve system response and stability.