The cash coverage ratio directly measures the ability of a company to meet its obligation to pay:
A) an invoice to a supplier.
B) wages to an employee.
C) interest to a lender.
D) principal to a lender.
E) a dividend to a shareholder.

Question

Quizplus · Accepted Answer

The cash coverage ratio is a financial metric that measures a company's ability to pay interest on its outstanding debt, not invoices, wages, principal repayments, or dividends.

The Cash Coverage Ratio Directly Measures the Ability of a Company