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Falak Naz
Falak Naz, Accountant
Category: Homework
Satisfied Customers: 532
Experience:  I am a qualified Chartered Accountant. For the last five years i am working as manager
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7) For a given level of profitability as measured by profit

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7) For a given level of profitability as measured by profit margin, the firm's return on equity will
A. decrease as its current ratio increases.
B. decrease as its times-interest-earned ratio decreases.
C. increase as its debt-to assets ratio increases.
D. increase as its debt-to-assets ratio decreases.

8) The most rigorous test of a firm's ability to pay its short-term obligations is its
A. quick ratio.
B. times-interest-earned ratio.
C. debt-to-assets ratio.
D. current ratio.

9) If a firm has both interest expense and lease payments,
A. times interest earned will be greater than fixed charge coverage.
B. fixed charge coverage cannot be computed.
C. times interest earned will be the same as fixed charge coverage.
D. times interest earned will be smaller than fixed charge coverage.
Submitted: 7 years ago.
Category: Homework
Expert:  Falak Naz replied 7 years ago.

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