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If a Business Has a Fixed-Charges Coverage Ratio of 5

Question 87

Multiple Choice

If a business has a fixed-charges coverage ratio of 5.0 times and the industry average is 4.0 times, how does the company compare to the industry average?


A) The company may be able to service all its fixed charges better than other companies in the industry.
B) The company may not be able to service all its fixed charges better than other companies in the industry.
C) The company is doing better than the industry average.
D) The company may not be able to survive with its current financial obligations.

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