The cash coverage ratio directly measures the ability of a firm's revenues to meet which one of its following obligations?
A)payment to supplier
B)payment to employee
C)payment of interest to a lender
D)payment of principle to a lender
E)payment of a dividend to a shareholder

Question

Quizplus · Accepted Answer

The cash coverage ratio measures how much cash a company generates to cover its interest payments. Therefore, it directly measures a firm's ability to pay interest to a lender.

The Cash Coverage Ratio Directly Measures the Ability of a Firm's