B/S Leverage: LEVERAGE Debt/Total Capital DebV/EBITDA Times Interest Earned Fixed Charge Coverage 2020 2019 2018 2017 251.4% 150.2% 89.0 % 41.9% 3.75x 2.02x 1.82x 0.76x 3x 6.3x 8.4x 44.7x 1.9x 2.9x 3.1x 3.8x a. Based on the leverage ratios above, describe what is happening to leverage at Gracenat Company AND provide two different and separate reasons why this might have happened. b. Based on these leverage ratios, what do you believe the outlook is for this company in two years (2022)?
B/S Leverage: LEVERAGE Debt/Total Capital DebV/EBITDA Times Interest Earned Fixed Charge Coverage 2020 2019 2018 2017 251.4% 150.2% 89.0 % 41.9% 3.75x 2.02x 1.82x 0.76x 3x 6.3x 8.4x 44.7x 1.9x 2.9x 3.1x 3.8x a. Based on the leverage ratios above, describe what is happening to leverage at Gracenat Company AND provide two different and separate reasons why this might have happened. b. Based on these leverage ratios, what do you believe the outlook is for this company in two years (2022)?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
B/S Leverage:
LEVERAGE
2020
2019
2017
Debt/Total Capital
150.2%
2018
Debt/EBITDA
2.02x
6.3x
2.9x
89.0%
1.82x
8.4x
3.1x
41.9%
0.76x
44.7x
3.8x
Times Interest Earned
Fixed Charge Coverage
251.4%
3.75x
3x
1.9x
a. Based on the leverage ratios above, describe what is happening to leverage at Gracenat Company AND provide two different and separate reasons why this might have happened.
b. Based on these leverage ratios, what do you believe the outlook is for this company in two years (2022)?
Transcribed Image Text:←
11:05
Expert Q&A
B/S Leverage:
LEVERAGE
Debt/Total Capital
Debt/EBITDA
Times Interest Earned
Fixed Charge Coverage
2020 2019 2018
251.4% 150.2% 89.0% 41.9%
3.75x 2.02x
0.76x
1.9x
6.3x
2017
2.9x
8.4x 44,7x
3.8x
YBRO. 82%
a. Based on the leverage ratios above, describe what is happening to leverage at Gracenat
Company AND provide two different and separate reasons why this might have happened.
b. Based on these leverage ratios, what do you believe the outlook is for this company in two
years (2022)?
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