A ratio checks whether a firm can cover its interest expense as it fal…

Question

A ratio checks whether a firm can cover its interest expense as it falls due. That ratio is:

Accepted Answer

A. Interest earned

1. Interest payments are the concern.
2. Coverage is being measured.
3. It is the interest earned ratio.
_Source: OpenStax Principles of Finance 2e, Chapter 6, Measures of Financial Health._

Answer

Stock turnover

Answer

Quick ratio test

Answer

Cash ratio test

A ratio checks whether a firm can cover its interest expense as it falls due. That ratio is:

Keep practising Financial Ratio Analysis