Two online travel companies, E-Travel and Pricecheck, provide the following selected financial data: E-Travel PricecheckTotal assets $7,437,156 $2,094,224Total liabilities 4,254,475 486,610Total stockholders’ equity 3,182,681 1,607,614Sales revenue $3,455,426 $2,838,212Interest expense 94,233 34,084Tax expense 174,400 57,168Net income 319,526 509,472Required:1. Calculate the debt to equity ratio for E-Travel and Pricecheck. Which company has the higher ratio?2. Calculate the times interest earned ratio for E-Travel and Pricecheck. Which company is better able to meet interest payments as they become due?
Two online travel companies, E-Travel and Pricecheck, provide the following selected financial data:
E-Travel Pricecheck
Total assets $7,437,156 $2,094,224
Total liabilities 4,254,475 486,610
Total
Sales revenue $3,455,426 $2,838,212
Interest expense 94,233 34,084
Tax expense 174,400 57,168
Net income 319,526 509,472
Required:
1. Calculate the debt to equity ratio for E-Travel and Pricecheck. Which company has the higher ratio?
2. Calculate the times interest earned ratio for E-Travel and Pricecheck. Which company is better able to meet interest payments as they become due?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
