Final answer:
The correct statement is d) The cash coverage ratio will always be higher than the times interest earned ratio, since it accounts for non-cash expenses like depreciation when measuring a firm's ability to pay its debt. Statements a), b), and c) are incorrect because they misstate financial ratios or their calculations.
Step-by-step explanation:
The correct statement among the given options is d) The cash coverage ratio will always be higher than the times interest earned ratio and the difference depends on the amount of depreciation expense and therefore the amount and age of fixed assets. The quick or acid ratio and the cash coverage ratio are both measures of a firm's liquidity, but they use different methods to assess this. The quick ratio evaluates a company's ability to meet its short-term obligations without selling its inventory, while the cash coverage ratio measures a company's ability to pay its debt with its operating cash flow, taking into account additional non-cash expenses like depreciation.
A financial ratio, contrary to statement b), is a comparative figure that provides insight into the financial health and performance of a company and can be easily used for comparison over time or across firms. Finally, statement c) incorrectly defines the net profit margin, which is actually calculated by dividing net income by sales.