Multiple Choice
In 2014, C Co. reported a times interest earned ratio of 12.33 times while P Co. reported a ratio of 11.07 times. Which of the following statements is false?
A) C Co. is more liquid than P. Co.
B) Lenders would be pleased with the ratios of both companies and be willing to lend them money for future expansion.
C) P Co. and C Co. have more than adequate ratios demonstrating their ability to cover interest charges with their earnings levels.
D) C Co's ratio is about 11.3% higher than P Co's ratio.
Correct Answer:
Verified
Correct Answer:
Verified
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