The ratio establishes the relationship between profit before interest and tax and fixed interest charges is
A)interest cover ratio.
B)fixed dividend cover ratio.
C)debt service coverage ratio.
D)dividend yield ratio.

Question

Quizplus · Accepted Answer

The interest cover ratio is the correct answer because it measures a company's ability to meet its interest payments from its profits before interest and tax. This ratio is crucial for assessing the financial health and stability of a company, especially in terms of its debt obligations.

The Ratio Establishes the Relationship Between Profit Before Interest and Tax