Which of the following ratios helps evaluate a company's ability to make interest payments as they...
Which of the following ratios helps evaluate a company's ability to make interest payments as they come due?
A. EBIT/Interest
B. ROA
C. None of these
D. Total Debt/Capitalization
Homework Answers
Interest coverage ratio = Earnings before Interest and taxes / Interest Expense
EBIT to interest expense is a measurement of how much a company is earning over its interest payments. It is used to see how well a company can pay the interest on outstanding debt.
Option 'A' is correct
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