help 9

Which of the following statements is correct? The quick or acid ratio measures the ability of the firm to pay its interest obligations by comparing earnings before interest and taxes (EBIT) to interest expense. A financial ratio is a measure of absolute size and therefore the financial ratios are more difficult to compare to other time periods or to other firms than changes in dollar amounts. Net Profit Margin = Sales - Gross Income. All the answers are correct. The cash coverage ratio will always be higher than the times interest earned ratio and the difference depends on the amount of depreciation expense and therefore the amount and age of fixed assets