Halverson's times interest earned ratio was 2.98 in 2022, 279 in 2021 and 2.31 in 2020. Which of the following statements about the ratio is correct? Multiple Choice The increasing ratio implies increased i financing The increasing ratio indicates decreasing levels of debt on which interest is incurred The increasing ratio would be considered by creditors to be an indicator of higher risk The increasing ratio indicates the strategy of pursuing growth by investment in other companies, which has increased debt but Halverson's profts have not yet increased from those investments

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Halverson's times interest earned ratio was 2.98 in 2022, 2.79 in 2021, and 2.31 in 2020. Which of the following statements about the ratio is correct?
Multiple Choice
The increasing ratio implies increased long-term debt financing
The increasing ratio indicates decreasing levels of debt on which interest is incurred
The increasing ratio would be considered by creditors to be an indicator of higher risk
The increasing ratio indicates the strategy of pursuing growth by investment in other companies, which has increased debt, but Halverson's profts have not yet increased from those investments.
Transcribed Image Text:Halverson's times interest earned ratio was 2.98 in 2022, 2.79 in 2021, and 2.31 in 2020. Which of the following statements about the ratio is correct? Multiple Choice The increasing ratio implies increased long-term debt financing The increasing ratio indicates decreasing levels of debt on which interest is incurred The increasing ratio would be considered by creditors to be an indicator of higher risk The increasing ratio indicates the strategy of pursuing growth by investment in other companies, which has increased debt, but Halverson's profts have not yet increased from those investments.
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