1) A creditor of an organization wants to determine if the organization is likely to be...
1) A creditor of an organization wants to determine if the organization is likely to be able to continue its payments on its outstanding debts. Which of the following ratios would be the BEST choice to make this determination?
a. Times interest earned
b. Long-term debt to capital
c. Debt to tangible net worth
d. Total liabilities to total assets
Homework Answers
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Option A is the answer Times interest earned ratio |
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Times interest earned ratio calculates the ability of firm in paying the interest on its debts. Times interest earned ratio = EBIT/Interest expense |
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1) A creditor of an organization wants to determine if the
organization is likely to be...
please help 1. A times interest earned ratio of 1.20 to 1 means: a. that the...
please help
1. A times interest earned ratio of 1.20 to 1 means: a. that the firm will default on its interest payment. b. that net income is less than the interest expense c. that the cash flow is less than the net income. d. that the cash flow exceeds the net income e. that net income is greater than the interest expense. 2. The debt ratio indicates: a. the ability of the firm to pay its current obligations. b....
Discontinued operations 10.03) 0.01 0.01 0.01 0.01 Net earnings per share $ 150 $ 1.70 $...
Discontinued operations 10.03) 0.01 0.01 0.01 0.01 Net earnings per share $ 150 $ 1.70 $ 1.47 $ 1.38 $ 1.26 prin lease patients were all $10.000, 2010, 527,000, 2009, 528,500, 200, 50,DUDE 2007, $27.000 dollar in thousandu) P 7-11 Required Answer the following multiple choice questions: Which of the following ratios can be used as a guide to a firm's ability to carry debt from an income perspective? 1. Debt ratio 2. Debt to tangible net worth 3. Debt/equity...
c. What is the impact of incl income be excluded from the times interest earned coverage?...
c. What is the impact of incl income be excluded from the times interest earned coverage? P 7-9 Allen Company and Barker Company are competitors in the same industry. Selected financial data from their 2011 statements follow. Balance Sheet December 31, 2011 Barker Company Allen Company $ 35,000 120,000 190,000 100,000 20,000 520,000 $985,000 10,000 45,000 70,000 40,000 11,000 180,000 $356,000 Cash Accounts receivable Inventory Investments Intangibles Property, plant, and equipment Total assets (continued) (P 7-9 CONTINUED) Allen Company Barker...
Compute and Interpret Liquidity, Solvency and Coverage Ratios Selected balance sheet and income statement information for...
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Houle Furniture Company has asked you to determine whether the company's ability to pay its current...
Houle Furniture Company has asked you to determine whether the company's ability to pay its current liabilities and long-term debts improved or deteriorated during 2018. (Click the icon to view the financial statement data.) Read the requirement. Calculate the following ratios for 2018 and 2017. Round your answers to two decimal places. a. Net working capital A Data Table Select the formula and then enter the amounts to calculate the working capital for 2018 and 2017. Net working capital 2018...
p 7-9 Allen Company and Barker Company are competitors in the same industry. Selecte financial data...
p 7-9 Allen Company and Barker Company are competitors in the same industry. Selecte financial data from their 2011 statements follow. Balance Sheet December 31, 2011 Barker Company 35,000 120,000 190,000 100,000 20,000 520,000 $985,000 Allen Company Cash Accounts receivable Inventory Investments Intangibles Property, plant, and equipment 10,000 45,000 70,000 40,000 11,000 180,000 $356,000 Total assets ng-Term Debt-Paying Ability (P 7-9 coNTINUED) Allen Company Barker Accounts payable Bonds payable Preferred stock, $1 par Common stock, $10 par Retained earnings 60,000...
(1) You have been asked to evaluate the long-term borrowing position of Client, Inc. However, you...
(1) You have been asked to evaluate the long-term borrowing position of Client, Inc. However, you were given only the following limited information. (8 points) Bonds payable, 12% $1,200,000 Accounting payable 200,000 Stockholders' equity 1,500,000 Current assets 1,870,000 Tangible assets, net 1,600,000 Intangible assets 90,000 Interest expenses 80,000 Earnings before interest expenses and taxes 350,000 Required: Assuming that this is the only information you will receive, estimate the following ratios. a. Times interest earned ratio b. Debt ratio C. Debt/equity...
Exercise 9-89 Ratio Analysis Rising Stars Academy provided the following information on its 2019 balance sheet...
Exercise 9-89 Ratio Analysis Rising Stars Academy provided the following information on its 2019 balance sheet and statement of cash flows: Long-term debt $ 4,400 Interest expense $ 398 Total liabilities 8,972 Net income 559 Total assets 38,775 Interest payments 432 Total equity 29,803 Cash flows from operations 1,015 Operating income 1,223 Income tax expenses 266 Income taxes paid 150 Required: Calculate the following ratios for Rising Stars. Round your answers to three decimal places. a. Debt to equity b....
Consider this simplified balance sheet for Geomorph Trading: $ Current assets Long-term assets $ 120 520...
Consider this simplified balance sheet for Geomorph Trading: $ Current assets Long-term assets $ 120 520 70 270 Current liabilities Long-term debt Other liabilities Equity 90 $ 640 210 $ 640 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB a. What is the company's debt-equity ratio? (Round your answer to 2 decimal places.) b. What is the ratio of total long-term debt to total long-term capital? (Round your answer to 2 decimal places.) c. What is its net working capital? d. What is its current ratio? (Round...
a) If you were a creditor, could you give short term loan to SPRING company? Give...
a) If you were a creditor, could you give short term
loan to SPRING company?
Give reasons, compare with generally accepted accounting standards,
find net working capital and discuss the Five C's of credit.
b) Calculate the operating cycle for the company and
evaluate the efficiency of the corporation.
c) How could you evaluate the profitability position
of that company?
1PUESTIONS (3) The first three questions are elated with the FALL CoMpany Compute the actual 2013 fnancial ratios listed abeve...
please help
1. A times interest earned ratio of 1.20 to 1 means: a. that the firm will default on its interest payment. b. that net income is less than the interest expense c. that the cash flow is less than the net income. d. that the cash flow exceeds the net income e. that net income is greater than the interest expense. 2. The debt ratio indicates: a. the ability of the firm to pay its current obligations. b....
Discontinued operations 10.03) 0.01 0.01 0.01 0.01 Net earnings per share $ 150 $ 1.70 $ 1.47 $ 1.38 $ 1.26 prin lease patients were all $10.000, 2010, 527,000, 2009, 528,500, 200, 50,DUDE 2007, $27.000 dollar in thousandu) P 7-11 Required Answer the following multiple choice questions: Which of the following ratios can be used as a guide to a firm's ability to carry debt from an income perspective? 1. Debt ratio 2. Debt to tangible net worth 3. Debt/equity...
c. What is the impact of incl income be excluded from the times interest earned coverage? P 7-9 Allen Company and Barker Company are competitors in the same industry. Selected financial data from their 2011 statements follow. Balance Sheet December 31, 2011 Barker Company Allen Company $ 35,000 120,000 190,000 100,000 20,000 520,000 $985,000 10,000 45,000 70,000 40,000 11,000 180,000 $356,000 Cash Accounts receivable Inventory Investments Intangibles Property, plant, and equipment Total assets (continued) (P 7-9 CONTINUED) Allen Company Barker...
Compute and Interpret Liquidity, Solvency and Coverage Ratios Selected balance sheet and income statement information for Starbucks for 2018 and 2017 follows. ($ millions) Cash 2018 2017 $ 8,756.3 $2,462.3 181.5 228.6 Short-term investments Accounts receivable 693.1 870.4 Current assets 12,494.2 5,283.4 5,684.2 4,220.7 349.9 Current liabilities Short-term debt Long-term debt Total liabilities Interest expense Capital expenditures Equity Cash from operations Earnings before interest and taxes 9,090.2 3,932.6 22,980.6 8,908.6 170.3 92.5 1,976.4 1,519.4 1,175.8 5,457.0 11,937.8 4,251.8 3,883.3 4,134.7...
Houle Furniture Company has asked you to determine whether the company's ability to pay its current liabilities and long-term debts improved or deteriorated during 2018. (Click the icon to view the financial statement data.) Read the requirement. Calculate the following ratios for 2018 and 2017. Round your answers to two decimal places. a. Net working capital A Data Table Select the formula and then enter the amounts to calculate the working capital for 2018 and 2017. Net working capital 2018...
p 7-9 Allen Company and Barker Company are competitors in the same industry. Selecte financial data from their 2011 statements follow. Balance Sheet December 31, 2011 Barker Company 35,000 120,000 190,000 100,000 20,000 520,000 $985,000 Allen Company Cash Accounts receivable Inventory Investments Intangibles Property, plant, and equipment 10,000 45,000 70,000 40,000 11,000 180,000 $356,000 Total assets ng-Term Debt-Paying Ability (P 7-9 coNTINUED) Allen Company Barker Accounts payable Bonds payable Preferred stock, $1 par Common stock, $10 par Retained earnings 60,000...
(1) You have been asked to evaluate the long-term borrowing position of Client, Inc. However, you were given only the following limited information. (8 points) Bonds payable, 12% $1,200,000 Accounting payable 200,000 Stockholders' equity 1,500,000 Current assets 1,870,000 Tangible assets, net 1,600,000 Intangible assets 90,000 Interest expenses 80,000 Earnings before interest expenses and taxes 350,000 Required: Assuming that this is the only information you will receive, estimate the following ratios. a. Times interest earned ratio b. Debt ratio C. Debt/equity...
Consider this simplified balance sheet for Geomorph Trading: $ Current assets Long-term assets $ 120 520 70 270 Current liabilities Long-term debt Other liabilities Equity 90 $ 640 210 $ 640 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB a. What is the company's debt-equity ratio? (Round your answer to 2 decimal places.) b. What is the ratio of total long-term debt to total long-term capital? (Round your answer to 2 decimal places.) c. What is its net working capital? d. What is its current ratio? (Round...
a) If you were a creditor, could you give short term
loan to SPRING company?
Give reasons, compare with generally accepted accounting standards,
find net working capital and discuss the Five C's of credit.
b) Calculate the operating cycle for the company and
evaluate the efficiency of the corporation.
c) How could you evaluate the profitability position
of that company?
1PUESTIONS (3) The first three questions are elated with the FALL CoMpany Compute the actual 2013 fnancial ratios listed abeve...
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