• 22. Which of the following is the numerator used incalculating the times interest earned ratio?
  • net income + interest expense + tax expense
  • net income + interest expense
  • net income + tax expense
  • Net income
• 23. Other things being equal, the higher the timesinterest earned ratio, the higher the likelihood of meetinginterest payments as they become due.
  • true
  • False
• 24. A gross profit ratio of 55% indicates that:
  • for each $1 of gross profit the company generates $0.55 in netincome
  • for each $1 of gross profit, the company generates $0.55 insales
  • for each $1 of net income the company generates $0.55 in grossprofit
  • for $1 of sales the company generates $0.55 in grossprofit
• 25. A country recently allowed foreign companies tooperate in an industry, which was previously open only to domesticproducers. Gross profit ratios are more likely to decline in thisindustry in the future.
  • true
  • False

Answer rating: 100% (QA)

Solution 22 Time interest earned ratio Earning before interest and taxes ... View the full answer