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Which of the following statements is true? To analyze the risk of a firm's capital structure, the analyst need only assess the three debt ratios.
Which of the following statements is true?
To analyze the risk of a firm's capital structure, the analyst need only assess the three debt ratios. | ||
The fixed charge coverage ratio is a narrower measure of coverage capability because it considers only operating leases and not interest expense. | ||
The cash interest coverage ratio measures how many times interest payments can be covered by cash flow from operations before interest and taxes. | ||
Times interest earned calculates the amount of cash flow from operations available to make interest payments. |
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