Two online travel companies, E-Travel and Pricecheck, provide the following selected financial data: E-Travel Total assets Total liabilities $ 4,437,156 2,254,475 Total stockholders' equity 2,182,681 Pricecheck $ 1,574,224 466,610 1,107,614 Sales revenue $ 2,455,426 $ 1,838,212 Interest expense 74,233 14,084 Income tax expense 134,400 37,168 Net income 279,526 469,472 Required: 1-a. Calculate the debt to equity ratio for E-Travel and Pricecheck. 1-b. Which company has higher leverage risk? 2-a. Calculate the times interest earned ratio for E-Travel and Pricecheck. 2-b. Which company is better able to meet interest payments as they become due? Complete this question by entering your answers in the tabs below. Req 1a Req 1b Req 2a Req 2b Which company has higher leverage risk? Which company has higher leverage risk? < Req 1a Req 2a >
Two online travel companies, E-Travel and Pricecheck, provide the following selected financial data: E-Travel Total assets Total liabilities $ 4,437,156 2,254,475 Total stockholders' equity 2,182,681 Pricecheck $ 1,574,224 466,610 1,107,614 Sales revenue $ 2,455,426 $ 1,838,212 Interest expense 74,233 14,084 Income tax expense 134,400 37,168 Net income 279,526 469,472 Required: 1-a. Calculate the debt to equity ratio for E-Travel and Pricecheck. 1-b. Which company has higher leverage risk? 2-a. Calculate the times interest earned ratio for E-Travel and Pricecheck. 2-b. Which company is better able to meet interest payments as they become due? Complete this question by entering your answers in the tabs below. Req 1a Req 1b Req 2a Req 2b Which company has higher leverage risk? Which company has higher leverage risk? < Req 1a Req 2a >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Two online travel companies, E-Travel and Pricecheck, provide the following selected
financial data:
E-Travel
Total assets
Total liabilities
$ 4,437,156
2,254,475
Total stockholders' equity
2,182,681
Pricecheck
$ 1,574,224
466,610
1,107,614
Sales revenue
$ 2,455,426
$ 1,838,212
Interest expense
74,233
14,084
Income tax expense
134,400
37,168
Net income
279,526
469,472
Required:
1-a. Calculate the debt to equity ratio for E-Travel and Pricecheck.
1-b. Which company has higher leverage risk?
2-a. Calculate the times interest earned ratio for E-Travel and Pricecheck.
2-b. Which company is better able to meet interest payments as they become due?
Complete this question by entering your answers in the tabs below.
Req 1a
Req 1b
Req 2a
Req 2b
Which company has higher leverage risk?
Which company has higher leverage risk?
< Req 1a
Req 2a >
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