Answer the below questions. (a) What is the purpose of an interest coverage ratio? (b) What does
Question:
(a) What is the purpose of an interest coverage ratio?
(b) What does an interest coverage ratio of 1.8 × mean?
(c) Why are interest coverage ratios typically computed on a pretax basis?
(d) Why would a fixed charge coverage ratio be materially different from an interest coverage ratio?
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a The purpose of an interest coverage ratio is to measure the number of times interest charges are c...View the full answer
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