Author Question: Juanita has the following three ratios: 1. debt service coverage = 2.5, 2. debt ratio = 0.5, and 3 . ... (Read 125 times)

mpobi80 · **on:** Jul 11, 2018

Juanita has the following three ratios: 1. debt service coverage = 2.5, 2. debt ratio = 0.5, and 3 . liquidity ratio = 0.8. We can say that Juanita has

A)

poor solvency and poor liquidity.
B)

strong solvency and strong liquidity.
C)

strong liquidity but poor solvency.
D)

strong solvency but poor liquidity.

Question 2

Which of the following statements about the extra expense coverage form is (are) true?

I. It provides coverage for the increased cost that must be paid to continue operations during a period of restoration.
II. It provides coverage for lost business income if a key customer or key supplier experiences a loss.
A) I only
B) II only
C) both I and II
D) neither I nor II