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The company's ability to meet short-term obligations is measured using several different interest coverage ratios. These...

The company's ability to meet short-term obligations is measured using several different interest coverage ratios. These ratios are made using several different measures of earnings. Which of the following is NOT one of those measures of earnings? a) Earnings before interest, taxes, and amortization (EBITA) b)Earnings before interest, taxes, depreciation, and amortization (EBITDA) c) Earnings before interest, taxes, amortization, and preferred dividends (EBITAD) d) Earnings before interest, taxes, depreciation, amortization, and rental expense (EBITDAR)

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Answer #1

Answer is c. Earnings before interest, taxes, amortization and rental expenses

Explanation:

To know the ability to meet the short term obligations the rental expenses is not considered i.e. the earnings after rental expenses are taken in to consideration.

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