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A financial analyst is given the following ratios for a firm and its industry. ...

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Question

Finance

A financial analyst is given the following ratios for a firm and its industry.

Firm Industry

Times Interest Earned (TIE) 6.4 5.0

EBITDA Coverage 5.0 4.6

Which of the following statements best represent the conclusion that the analyst

could draw from these ratios?

The firm covers its fixed charges at a higher rate than the industry on average.

The firms interest charges are larger than the industry on average.

The firm is more profitable than the industry.

The firm has a lower margin of safety than the industry on average.

The firm leases too many of its assets.

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