Multiple Choice
In 20X4, H Co's times interest earned ratio was 2.51 while T Co's ratio for that year was .80. Which of the following statements is false?
A) H Co's ratio appears to provide adequate coverage of interest from its present net earnings.
B) Since H Co's is actively pursuing growth through investment in other companies, its ratio may improve once those investments begin to generate additional net earnings.
C) T Co's ratio is very low and they present high risk to their creditors and investors.
D) H Co.'s ratio shows an extra margin of risk in case profitability deteriorates.
Correct Answer:
Verified
Correct Answer:
Verified
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