TRUE or FALSE (if false, why?)

1. Times interest earned determines the amount of interest income earned by a firm during a given period.
2. Short-term creditors are more interested in the ratios indicating the profitability of the firm.
3. The relationship between owners' equity and liabilities indicates the company's use of financial leverage. Leverage indicates the use a company makes of borrowed funds to increase the return on owners' equity.
4. Earnings per share is computed by dividing net income by the average number of preferred shares outstanding.
5. The rate of return on stockholders' equity represents the amount of dividends distributed by the corporation to its stockholders.
6. In conduction ratio analysis, the numbers to be compared and expressed as a ratio should be meaningfully related to each other so that the resulting ratio can serve the purpose for which it is computed.
7. the dividend payout is the ratio of dividends per share to earnings per share.
8. The average age of receivables, also called day's sales in receivables, indicate the average number of days during which the company must wait before receivables are written off and charged to bad debts.
9. In computing rate of return on total assets, the amount of return used is net income after interest expense and income tax.
10. Long-term creditors are more interested in the firm's liquidity than the firm's solvency