Which of the following would,generally,indicate an improvement in a company's financial position,other things held constant?
A)The TIE declines.
B)The DSO increases.
C)The EBITDA coverage ratio increases.
D)The current and quick ratios both decline.

Question

Quizplus · Accepted Answer

An increase in the EBITDA coverage ratio, which measures a company's ability to cover its interest expenses and repay its debts, would generally indicate an improvement in its financial position. A decline in the TIE (Times Interest Earned) ratio, which measures a company's ability to meet its interest payments, or an increase in the DSO (Days Sales Outstanding), which measures the average time it takes to collect receivables, would indicate a deterioration in the company's financial position. Also, a decline in both the current and quick ratios would indicate a weakening of the company's liquidity position, which is not necessarily a sign of improvement in overall financial position.

Which of the Following Would,generally,indicate an Improvement in a Company's