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Author Question: A note of caution in interpreting the debt ratio is that (Read 8 times)

zl00505

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on: Feb 5, 2023

Question 1

The times interest earned ratio measures a company's ability to
◦ pay interest and debt from current assets already on hand.
◦ pay interest and debt on the due date.
◦ maintain profit after paying interest.
◦ make interest payments out of current earnings.

Question 2

A note of caution in interpreting the debt ratio is that
◦ financing arrangements, such as leases, may be off-balance sheet arrangement and not be classified as debt on the balance sheet.
◦ financing arrangements, such as leases, may be classified as debt when in fact they do not require interest payments.
◦ long-term debt may be inflated because of a desire to reduce the current ratio.
◦ all debt decreases liquidity ratios.
Managerial Accounting ¦ Davis ¦ 4th Edition
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Marked as best answer by zl00505 on Feb 5, 2023

Harsh06

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Reply #1 on: Feb 5, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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zl00505

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Reply 2 on: Feb 5, 2023
Thanks for the timely response, appreciate it

chjcharjto14

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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