Multiple Choice
A Toronto firm has a times interest earned ratio of 2.7 times. This means:
A) The firm generated enough cash to cover its interest expense 2.7 times.
B) The firm has sufficient EBIT to cover its interest expense 2.7 times.
C) The interest expense of this firm exceeded earnings before taxes by 2.7 times.
D) The net income of this firm is sufficient to cover its interest expense 2.7 times.
E) The firm earned $1 in EBIT for every $2.70 it paid out in interest.
Correct Answer:
Verified
Correct Answer:
Verified
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