Shown below are data from recent reports of two publicly owned toy makers. Dollar amounts are stated in thousands.
| Tyco Toys, Inc, | Hasbro Inc, |
Total assets | $ 615,132 | $2,616,388 |
Total liabilities | 349,792 | 1,090,776 |
Interest expense | 28,026 | 37,588 |
Operating income | 13,028 | 304,672 |
a. Compute for each company (1) the debt ratio and (2) the interest coverage ratio. (Round the debt ratio to the nearest percent and the interest coverage ratio to two decimal places.)
b. In your opinion, which of these companies would a long-term creditor probably view as the safer investment? Explain.
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