- CFA Exams
- CFA Level I Exam
- Topic 3. Financial Statement Analysis
- Learning Module 15. Integration of Financial Statement Analysis Techniques
- Subject 2. Long-Term Equity Investment
CFA Practice Question
Which ratio is the most important factor to indicate that a company has plenty of financial capacity to add more debt if there is an investment reason?
B. A big cash flow interest coverage ratio.
C. A big operating cash flow to net income ratio.
A. A big profit margin.
B. A big cash flow interest coverage ratio.
C. A big operating cash flow to net income ratio.
Correct Answer: B
The ratio shows financial strength of a company.
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