Which financial ratio is a measure of the ability of the company to meet all of its fixed-charge obligations?
A) debt to asset ratio
B) debt to equity ratio
C) times interest earned
D) long-term debt to capital structure
E) coverage of fixed charges

Question

Quizplus · Accepted Answer

The coverage of fixed charges ratio measures a company's ability to meet all of its fixed-charge obligations, which includes interest, lease payments, and other fixed expenses, not just interest obligations.

Which Financial Ratio Is a Measure of the Ability of the Company