Under the Doctrine of __________ ,Senior Managers and Directors Have

question 63

Essay

Under the doctrine of __________ ,senior managers and directors have a fiduciary obligation to use reasonable care to protect the company's business operations.When they fail to meet the company's legal and regulatory duties,they can face lawsuits or other legal action.

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Definitions:

EBIT

Earnings Before Interest and Taxes - a measure of a firm's profitability that excludes interest and income tax expenses.

Accounts Payable

Accounts Payable is the amount of money a company owes its suppliers for goods or services received but not yet paid for.

Basic Earning Power Ratio

A financial ratio that shows how effectively assets are being used to generate earnings before the influence of taxes and financing costs.

Times-Interest-Earned Ratio

A measure of a company's ability to honor its debt payments, calculated by dividing earnings before interest and taxes (EBIT) by interest expenses.