Use Tableau to calculate and display the trends for the debt to equity and times interest earned ratios for each of the two companies in the period 2018-2021. the average debt to equity ratio and times interest earned ratio for companies in the General Retailers industry sector in a comparable time period are 1.92 and 10.6, respectively. 1. Other things being equal, do both companies appear to have the ability to meet their obligations as measured by the debt to equity ratio? 2. Based solely on the times interest earned ratios, do you reach the same conclusion as in Requirement 1? 3. Is the margin of safety provided to creditors by Discount Goods improving or declining in recent years as measured by the average times interest earned ratio?
Use Tableau to calculate and display the trends for the debt to equity and times interest earned ratios for each of the two companies in the period 2018-2021. the average debt to equity ratio and times interest earned ratio for companies in the General Retailers industry sector in a comparable time period are 1.92 and 10.6, respectively. 1. Other things being equal, do both companies appear to have the ability to meet their obligations as measured by the debt to equity ratio? 2. Based solely on the times interest earned ratios, do you reach the same conclusion as in Requirement 1? 3. Is the margin of safety provided to creditors by Discount Goods improving or declining in recent years as measured by the average times interest earned ratio?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Use Tableau to calculate and display the trends for the debt to equity and times interest earned ratios for each of the two companies in the period 2018-2021. the average debt to equity ratio and times interest earned ratio for companies in the General Retailers industry sector in a comparable time period are 1.92 and 10.6, respectively.
1. Other things being equal, do both companies appear to have the ability to meet their obligations as measured by the debt to equity ratio?
2. Based solely on the times interest earned ratios, do you reach the same conclusion as in Requirement 1?
3. Is the margin of safety provided to creditors by Discount Goods improving or declining in recent years as measured by the average times interest earned ratio?
Transcribed Image Text:long term solvency debt to equity ratio
Company / Year
Big Store
Discount Goods
2.0
1.9017
1.9
1.8220
1.8
1.7
1.6783
1.6732
1.6
1.5841
1.4907
1.5
1.4296
1.4119
1.4
1.3
1.2
1.1
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
2018
2019
2020
2021
2018
2019
2020
2021
Debt to equity Ratio
Transcribed Image Text:Long term solvency times interest earned ratio
Company
Big Store
Discount Goods
15
14.50
14
13
12.69
12
10.93
11
10.71
10
5.37
4.96
4.84
4.42
4
3
2
Times interest earned ratio
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education