Which of the following ratios provides insights about a company's risk and financial flexibility because it...

Which of the following ratios provides insights about a company's risk and financial flexibility because it measures the ability to cover the interest charges associated with debt?

earnings-based interest coverage.

return on common equity.

rate of change analysis.

gross profit margin.

3. As a corporate stakeholder, which do you wish to see reflected in the corporation's financial statements?

earnings quality.

earnings management.

earnings analysis.

earnings dividends.

Solutions

Expert Solution

Answer : A) earnings-based interest coverage.

Explanation to the answer:

earnings-based interest coverage ratios provides insights about a company's risk & financial flexibility because it measures the ability to cover the interest charges associated with debt

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earnings quality.

Explanation to the answer:

As a corporate stakeholder one can see earnings quality that is extent to which earnings is relevant & faithful representations of financial performance of current period as well as it enable the user of the financial statement for developing reasonable expectations for the future earnings.

ekkarill92 answered 1 year ago

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