Jingle Ltd. and Bell Ltd. belong to the same industry. A snapshot of some of their financial information is given below: Jingle Ltd. Bell Ltd. Current ratio 3.2 1 2 1 Acid-test ratio 1.7 1 1.1 1 Debt Equity ratio 30% 40% Times interest earned 6 5 You are a loans officer and both companies have asked for an equal 2-year loan. i) ii) If you could facilitate only one loan, which company would you refuse? Explain your reasoning briefly If both companies could be facilitated, would you be willing to do so? Explain your argument briefly.
Jingle Ltd. and Bell Ltd. belong to the same industry. A snapshot of some of their financial information is given below: Jingle Ltd. Bell Ltd. Current ratio 3.2 1 2 1 Acid-test ratio 1.7 1 1.1 1 Debt Equity ratio 30% 40% Times interest earned 6 5 You are a loans officer and both companies have asked for an equal 2-year loan. i) ii) If you could facilitate only one loan, which company would you refuse? Explain your reasoning briefly If both companies could be facilitated, would you be willing to do so? Explain your argument briefly.
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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Transcribed Image Text:Jingle Ltd. and Bell Ltd. belong to the same industry. A snapshot of
some of their financial information is given below:
Jingle
Ltd.
Bell
Ltd.
Current ratio
3.2 1
2 1
Acid-test ratio
1.7 1
1.1 1
Debt Equity ratio
30%
40%
Times interest earned
6
5
You are a loans officer and both companies have asked for an equal
2-year loan.
i)
ii)
If you could facilitate only one loan, which company would
you refuse? Explain your reasoning briefly
If both companies could be facilitated, would you be willing
to do so? Explain your argument briefly.
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