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<p><strong>(a)Current Ratio, </strong></p> <p><strong>(b)Acid Test Ratio,</strong></p> <p><strong>(c) Interest Coverage Ratio</strong></p> <p><strong>(d) Debtors Turnover</strong></p>
C. Interest Coverage Ratio.
Also known as, Times Interest Earned, is a measure of a firm's ability to cover interest expenses associated with borrowed funds the company is carrying.
Calculated as follows:
Earnings Before Interest and Taxes (EBIT) / Interest Expenses
(c) Interest Coverage Ratio
= EBIT / Interest Expense
(b)Acid Test Ratio
The answer is (C)
interst coverage ratio,,,
(c) Interest Coverage Ratio =EBIT/Interest Expense
Interest Expenses is the total debt service costs
Answer (c)
Option C .
