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Which of the statements is Not True about the Financial Expenses Coverage Ratio? a)     Its general standard is 7 or 8 times b)     It shows whether EBIT is sufficient to cover the financial expenses c)     It shows whether the taxable Income of the firm is sufficient to cover the financial expenses d)     When  EBIT / Financial Expenses  = 1, the firm has 0 profits after the financial expenses are paid

Which of the statements is Not True about the Financial Expenses Coverage Ratio? a)     Its general standard is 7 or 8 times b)     It shows whether EBIT is sufficient to cover the financial expenses c)     It shows whether the taxable Income of the firm is sufficient to cover the financial expenses d)     When  EBIT / Financial Expenses  = 1, the firm has 0 profits after the financial expenses are paid

Financial Reporting, Financial Statement Analysis and Valuation
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter6: Accounting Quality
Section: Chapter Questions
Problem 2IC
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Which of the statements is Not True about the Financial Expenses Coverage Ratio?
  • a) 
     
     Its general standard is 7 or 8 times
  • b) 
     
     It shows whether EBIT is sufficient to cover the financial expenses
  • c) 
     
     It shows whether the taxable Income of the firm is sufficient to cover the financial expenses
  • d) 
     
     When  EBIT / Financial Expenses  = 1, the firm has 0 profits after the financial expenses are paid
  •  
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