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One Criticism of the Interest and Fixed Charges Coverage Ratios

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Essay

One criticism of the interest and fixed charges coverage ratios as measures of long-term solvency risk is that they use earnings rather than cash flows in the numerator.Detail how the interest coverage ratio and fixed charges coverage ratio are calculated.In addition,discuss why using earnings in the numerator is a and what method could be used to alleviate this .


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Specific Culture

refers to the unique set of beliefs, values, customs, and practices that characterizes an organization, region, or group.

Geert Hofstede

A Dutch social psychologist known for his research on the interactions between national cultures and organizational cultures.

Management Techniques

These are methods, strategies, and practices used by leaders to administer and control organizational resources effectively to achieve desired outcomes.

U.S.

The United States, a federal republic in North America, composed of 50 states, a federal district, five major self-governing territories, and various possessions.

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