The ________ is calculated by dividing interest expense into the sum of pretax income and interest expense.
A)debt-to-equity ratio
B)long-term-debt-to-total capital ratio
C)debt-to-total-assets ratio
D)interest-coverage ratio
E)current ratio

Question

Quizplus · Accepted Answer

The interest-coverage ratio is calculated by dividing the company's pretax income by its interest expenses. It evaluates a company's ability to pay interest expenses on outstanding debt, therefore, measuring its creditworthiness.

The ________ Is Calculated by Dividing Interest Expense into the Sum