Explain Why the Equity Method Is Often Referred to as the Single

question 10

Essay

Explain why the equity method is often referred to as the single line method.

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Definitions:

Times Interest

A financial ratio that measures a company's ability to meet its interest payments based on current earnings. Often referred to as the interest coverage ratio.

Stock Market

A public market for the trading of company stock and derivatives at agreed upon prices.

Economic Value Added

A measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit.

Residual Income

Another term for economic value added (EVA).