An increase in ________ will decrease the interest coverage ratio.
A)the tax rate
B)gross profit
C)interest expense
D)ordinary shares

Question

Quizplus · Accepted Answer

The interest coverage ratio measures a company's ability to pay interest expenses on outstanding debt. Therefore, an increase in interest expenses will decrease the interest coverage ratio as it indicates a higher burden of debt. The other choices (A, B, and D) do not directly affect the interest coverage ratio.

An Increase in ________ Will Decrease the Interest Coverage Ratio