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:

Customer Oriented

An approach to business and product development that focuses on creating a positive experience for the customer and addressing their needs and feedback.

Managerial Appreciation

The recognition and value given by managers to their employees for their hard work and achievements.

Collaborative Filtering

A mechanism that filters large amounts of information about many consumers’ previous purchases that may be related in some way in order to predict consumer preferences.

Consumer Preferences

The tendencies or choices exhibited by consumers regarding products, services, or brands based on their needs, desires, and tastes.