Which ratio measures a business's ability to adequately service its interest and leasing expenses?
A) the quick ratio
B) the total assets turnover ratio
C) the fixed-charges coverage ratio
D) the profit margin on revenue ratio

Question

Quizplus · Accepted Answer

The fixed-charges coverage ratio measures a company's ability to cover its fixed charges, such as interest and leasing expenses, with its earnings. This ratio is crucial for assessing the financial health and stability of a business, especially in terms of its long-term debt obligations.

Which Ratio Measures a Business's Ability to Adequately Service Its