Question
Which of the following statements are true about the interest-burden ratio? Check all that apply: It can be expressed as Net profits/Pretax profits. A company
Which of the following statements are true about the interest-burden ratio?
Check all that apply:
It can be expressed as Net profits/Pretax profits.
A company with higher financial leverage will have a lower interest-burden ratio.
If the company has no financial leverage, the interest-burden ratio will be equal to 1.
If the company has no financial leverage, the interest-burden ratio will be equal to 0.
It can be expressed as EBIT/Interest Expense.
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Managerial Accounting Tools for business decision making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
6th Edition
978-0470477144, 1118096894, 9781118214657, 470477148, 111821465X, 978-1118096895
