Which of the following would, generally, indicate an improvement in a company's financial position, holding other things constant?
A) The total assets turnover decreases.
B) The TIE declines.
C) The DSO increases.
D) The EBITDA coverage ratio increases.
E) The current and quick ratios both decline.

Question

Quizplus · Accepted Answer

An increase in the EBITDA coverage ratio would generally indicate an improvement in a company's financial position because it means the company is generating more earnings to cover its interest expenses. The other choices would generally indicate a decline in the company's financial position.

Which of the Following Would, Generally, Indicate an Improvement in a Company's