In 2012,C Co.reported a times interest earned ratio of 12.33 times while P Co.reported a ratio of 11.07 times.Which of the following statements is false?
A)P Co.and C Co.have more than adequate ratios demonstrating their ability to cover interest charges with their earnings levels.
B)C Co's ratio is about 11.3% higher than P Co's ratio.
C)C Co.is more liquid than P.Co.
D)Lenders would be pleased with the ratios of both companies and be willing to lend them money for future expansion.

Question

Quizplus · Accepted Answer

The question does not provide any information on the liquidity of the two companies, so it cannot be concluded that one is more liquid than the other. Choices A, B, and D are all true based on the given information.