The Interest Coverage Ratio

question 13

Multiple Choice

The interest coverage ratio:

• A)Is computed by dividing total liabilities by annual interest expense.
• B)Is computed by dividing liquid assets by annual required interest payment.
• C)Indicates the percentage of total assets that are financed with borrowed money.
• D)Measures the number of times the annual interest expense could be covered by annual income from operations.

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Definitions:

Debrief Phase

A critical discussion following an event, activity, or project, where participants reflect on what happened, analyze outcomes, and identify learning points.

Role Play

An educational technique in which people simulate real-life situations to practice behaviors and decision-making in a safe environment.

Feedback

Information given to an individual or group about their performance or behavior, intended to reinforce strengths or identify and improve weaknesses.

Simulations

Interactive models or scenarios designed to mimic real-life situations, allowing individuals to practice and learn in a safe, controlled environment.