Which ratio measures how well a company can pay its interest on debt plus lease payments?
A) inventory turnover
B) average collection period
C) capital assets turnover
D) fixed-charges coverage

Question

Quizplus · Accepted Answer

The fixed-charges coverage ratio measures a company's ability to cover its fixed charges, such as interest on debt and lease payments, with its earnings. This ratio is important for assessing the financial health and stability of a company, especially its ability to meet its long-term financial obligations.

Which Ratio Measures How Well a Company Can Pay Its