Coverage ratios measure a firm's
A)ability to use debt financing
B)use of plant and equipment
C)ability to cover (i.e., sell)its inventory
D)ability to meet fixed payments such as interest

Question

Quizplus · Accepted Answer

Coverage ratios are financial metrics used to evaluate a company's ability to meet its debt obligations, including fixed payments like interest. These ratios are crucial for lenders and investors to assess the financial health and risk level of a company.

Coverage Ratios Measure a Firm's