Which of the following statements are true about the interest-burden ratio? Check all that apply: If the company has no financial leverage, the interest-burden ratio will be equal to 1. A company with higher financial leverage will have a lower interest-burden ratio. If the company has no financial leverage, the interest-burden ratio will be equal to 0. It can be expressed as Net profits/Pretax profits. It can be expressed as EBIT/Interest Expense.
Which of the following statements are true about the interest-burden ratio? Check all that apply: If the company has no financial leverage, the interest-burden ratio will be equal to 1. A company with higher financial leverage will have a lower interest-burden ratio. If the company has no financial leverage, the interest-burden ratio will be equal to 0. It can be expressed as Net profits/Pretax profits. It can be expressed as EBIT/Interest Expense.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Which of the following statements are true about the interest-burden ratio?
Check all that apply:
If the company has no financial leverage, the interest-burden ratio will be equal
to 1.
A company with higher financial leverage will have a lower interest-burden
ratio.
if the company has no financial leverage, the interest-burden ratio will be equal
to 0.
It can be expressed as Net profits/Pretax profits.
It can be expressed as EBIT/Interest Expense.
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