time interest earned indicates a firms long term, debt-paying ability from the balance sheet view 1- true 2- false
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time interest earned indicates a firms long term, debt-paying ability from the
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- the ratio which includes the average credit period received by the a business firm is known as options are : current asset turn over ratio working capital turnver ratio creditors turnover ratio inventory turnover ratioFor a company holding significant net financial assets (NFO), after issuing some new debt, its risk in operation should be_____ as before issuing the debt; and its required rate of return of equity should be ______ as before. A. the same as .... the same as B. lower than ... lower than C. higher than ... higher than D. the same as ... higher than Please donot provide solution in image format and provide solution in step by step format and asap2- Which of the following ratios would be most useful in determining a company's ability to cover its'interest payments? A. ROA. B Fixed charge coverage. C. Total asset turnover.
- Is there a readily recognisable debt-to-equity ratio that maximises a firm's value? What are your reasons for or against?Financial leverage is the gage of using the - in financial structure ---- --- Debts Loans O Both of aboveGive typing answer with explanation and conclusion If the company were to borrow more (or less), how would that impact the cost of debt and the WACC? Provide a specific assumed example. Weight of Equity 76.10% Weight of Debt 23.90% Cost of Equity 6.98% Cost of Debt 2.55% Tax Rate WACC 5.92%
- EXPLAIN THE RESULTS OF TOTAL LIABILITIES IN VERTICAL ANALYSISPrepare a classied balanced sheet in good form 1. Common Stock 2. Discountedd on Bonds Payable 3. Treasury Stock (at cost) 4. Notes Payable (short-term) 5. Raw Materials 6. Prefered Stock Investments (long-term) 7. Unearned Rent Revenue 8. Work in Process. 9. Copyrights 10. Buildings 11. Notes Recievable (short-term). 12. Cash. 13. Salaries and Wages Payable. 14. Accummlated Depreciation--Buildings 15. Restricted Cash for Plant Expansion 16. Land Held for Future Plant Site 17. Allowance for Doubtful Accounts 18. Retained Earnings 19. Paid-in capitial in Excess of Par -Common Stock 20. Unearned Subscriptions Revenue 21. Receivables--Officers (due in one year) 22. Inventory (finished goods) 23. Accounts Receivable 24. Bonds Payable (due in 4 years) 25. Noncontrolling Interest13. A short-term creditor would be interested in A. profitability ratio. B. efficiency ratio. C. liquidity ratio. D. leverage ratio. The quick ratio of a firm would be unaffected by which of the following? 14. A. Land held for investment is sold for cash. B. Equipment is purchased, financed by a long-term debt issue. C. Inventories are sold for cash D. Inventories are sold on a credit basis.
- Which of the following statements are true about the interest-burden ratio? Check all that apply: It can be expressed as EBIT/Interest Expense. If the company has no financial leverage, the interest-burden ratio will be equal to 0. A company with higher financial leverage will have a lower interest-burden ratio. If the company has no financial leverage, the interest-burden ratio will be equal to 1. It can be expressed as Net profits/Pretax profits.p Media One of important indicators of the firm's ability to repay its loans. O Net working capital O Paid-in capital Retained earnings O Common equityRATIO ANALYSIS. Debt Ratio Activity 6 · Understand the information provided by the debt ratio. · Identify the expected range and whether an increasing or decreasing trend is preferred. Purpose: The debt ratio compares total liabilities to total assets. This ratio measures the proportion of assets financed by debt. It is a measure of long-term solvency. Total liabilities DEBT RATI0 = Total assets JOHNSON & CITIGROUP 12/31/99 HEWLETT- PACKARD 10/3 1/99 JOHNSON 1/03/99 WAL-MART 1/31/99 ($ in 000s) Assets $716,937,000 $35,297,000 $26,211,000 $49,996,000 Liabilities 667,251,000 17,002,000 12,621.000 28,884,000 Stockholders' Equity $ 49,686,000 $18,295,000 $13,590,000 $21,112,000 Source: Disclosure, Inc, Compact D/SEC, 2000. 1. For each-company listed above, compute the debt ratio. Record your results below. Debt ratio: 0.93 2. The debt ratios computed above are primarily in the ranġe (less than 0,40 / 0.40 through 0.70 / over 0.70): 3. % of Wal-Mart's assets are financed by debt. 4.…