Fixed burden coverage ratio measures:
A)the coverage of expenses associated with debt and operating income.
B)the return on investment capital.
C)the magnitude of historical capital expenditure over the years.
D)none of the above.

Question

Quizplus · Accepted Answer

Fixed burden coverage ratio measures the ability of a company to cover its debt-related and operating expenses with its operating income. Therefore, option A is the correct choice. Option B and C are not related to fixed burden coverage ratio. Option D is incorrect as one of the options must be chosen.

Fixed Burden Coverage Ratio Measures