Which of the following will help an analyst determine how well a firm is able to meet its debt obligations?
A)Total liability turnover
B)Interest coverage ratio
C)Return on debt
D)Asset ratio

Question

Quizplus · Accepted Answer

The interest coverage ratio measures a firm's ability to pay the interest on its debt with its earnings. A higher interest coverage ratio indicates that a firm is more able to meet its debt obligations. Total liability turnover measures how efficiently a firm uses its liabilities to generate revenue, while return on debt measures how much profit a firm generates on its debt. The asset ratio measures a firm's ability to pay off its short-term debts with its assets.

Which of the Following Will Help an Analyst Determine How