Coverage Ratios: Sectors, Inc

question 44

Multiple Choice

Coverage ratios: Sectors, Inc., has an EBIT of $7,221,643 and interest expense of $611,800. Its depreciation for the year is $1,434,500. What is its cash coverage ratio?

• A) 15.42 times
• B) 18.34 times
• C) 14.15 times
• D) None of the above

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Definitions:

Poor Reliability

The lack of consistency in the outcomes of a measure or test over time.

Poor Validity

Refers to the degree to which an assessment or measurement tool fails to accurately reflect the concept it is intended to measure.

Flynn Effect

The observation that IQ scores have historically increased from one generation to another, worldwide.

Theory of Intelligence

Conceptual frameworks designed to understand the various aspects and abilities attributed to intelligence.