Which of the following does not accurately discuss the debt to equity ratio? A. Communicates how...
Which of the following does not accurately discuss the debt to equity ratio?
A. Communicates how assets are financed
B. Communicates to potential lender how much in assets are available which are not already claimed by other creditors
C. Total liabilities/stockholder’s equity
D. Communicates company’s ability to pay interest on borrowed funds
Homework Answers
Option D is the answer
It is Times interest earned ratio the one that measures the ability of company to pay interest on its debts. It is calculated by dividing interest expense upon income before interest And taxes
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Which of the following does not accurately discuss the debt to
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A. Communicates how...
Acc 202 Which of the following does not accurately describe Total Stockholder’s Equity? Represents the portion...
Acc 202 Which of the following does not accurately describe Total Stockholder’s Equity? Represents the portion of business assets not claimed by creditors Represents the value of ownership for stockholders Includes common stock and retained earnings Represents how much capital has been generated through issuance of stock All of the following accurately describe retained earnings except… The portion of total equity that is earned through profitable operations The accumulation of undistributed net income The portion of equity that is generated...
Which of the following does not accurately describe Total Stockholder’s Equity? Represents the portion of business...
Which of the following does not accurately describe Total Stockholder’s Equity? Represents the portion of business assets not claimed by creditors Represents the value of ownership for stockholders Includes common stock and retained earnings Represents how much capital has been generated through issuance of stock All of the following accurately describe retained earnings except… The portion of total equity that is earned through profitable operations The accumulation of undistributed net income The portion of equity that is generated through issuing...
QUESTION ANSWER Which of the following is generally a FALSE statement for the current ratio analysis?...
QUESTION ANSWER Which of the following is generally a FALSE statement for the current ratio analysis? Current ratios measure the ability of the company to pay its Current Liabilities with Current Assets. Companies want a current ratio number below O O O OO A potential lender, such as a bank, might use the current ratio to predict if the business borrowing the money can repay. A business with a lot of debt (Liabilities) will have a higher current ratio. I...
Clear All Current ratio A measure of a company's ability to pay its short-term liabilities out...
Clear All Current ratio A measure of a company's ability to pay its short-term liabilities out of short-term assets Debt ratio A measure that compares only the most liquid assets to current liabilities Times-interest-earned ratio An income statement measure of the ability of a company to service its debts Quick ratio A measure of the degree of protection afforded creditors in case of insolvency Debt-to-equity ratio A ratio that indicates what proportion of equity and debt a company is using...
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Debt Management Ratios Tierre's Ts, Inc. reported a debt to equity ratio of 4.0 times at the end of 2008. If the firm's total assets at year-end were $16.0 million, how much of their assets are financed with equity?
Mercer Inc. has a debt-to-equity ratio of 0.40
Mercer Inc. has a debt-to-equity ratio of 0.40. The required return on the company’s unlevered equity is 12%, and the pretax cost of the firm’s debt is 8%. Sales revenue for the company is expected to remain stable indefinitely at last year’s level of $18,300,000. Variable costs (including SG & A expenses) are 65 percent of sales. The corporate tax rate is 29%. The company distributes all its earnings as dividends at the end of each year. a. If the company...
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4. Debt management ratios Aa Aa E Companies have the opportunity to use varying amounts of...
4. Debt management ratios Aa Aa E Companies have the opportunity to use varying amounts of different sources of financing to acquire their assets, including internal and external sources, and debt (borrowed) and equity funds. Which of the following is considered a financially leveraged firm? O A company that uses debt to finance some of its assets O A company that uses only equity to finance its assets Which of the following is true about the leveraging effect? Using leverage...
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Which of the following statements is true of the debt to equity ratio? A. The higher the debt to equity ratio, the gre...
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QUESTION ANSWER Which of the following is generally a FALSE statement for the current ratio analysis? Current ratios measure the ability of the company to pay its Current Liabilities with Current Assets. Companies want a current ratio number below O O O OO A potential lender, such as a bank, might use the current ratio to predict if the business borrowing the money can repay. A business with a lot of debt (Liabilities) will have a higher current ratio. I...
Clear All Current ratio A measure of a company's ability to pay its short-term liabilities out of short-term assets Debt ratio A measure that compares only the most liquid assets to current liabilities Times-interest-earned ratio An income statement measure of the ability of a company to service its debts Quick ratio A measure of the degree of protection afforded creditors in case of insolvency Debt-to-equity ratio A ratio that indicates what proportion of equity and debt a company is using...
4. Debt management ratios Aa Aa E Companies have the opportunity to use varying amounts of different sources of financing to acquire their assets, including internal and external sources, and debt (borrowed) and equity funds. Which of the following is considered a financially leveraged firm? O A company that uses debt to finance some of its assets O A company that uses only equity to finance its assets Which of the following is true about the leveraging effect? Using leverage...
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