Use the following ratios from Walmart, Target, and Dollar General to answer Questions 12-13. Ratio Liabilities-to-equity ratio Times interest earned Cash from operations to total debt Target Walmart Walmart 1.246 11.49 0.787 Target This cannot be determined based on the information given O Dollar General 1.275 15.11 0.447 Dollar General 1.17 Based on the information given, which of the three companies is better able to cover its interest expense with current income? 7.85 0.974
Use the following ratios from Walmart, Target, and Dollar General to answer Questions 12-13. Ratio Liabilities-to-equity ratio Times interest earned Cash from operations to total debt Target Walmart Walmart 1.246 11.49 0.787 Target This cannot be determined based on the information given O Dollar General 1.275 15.11 0.447 Dollar General 1.17 Based on the information given, which of the three companies is better able to cover its interest expense with current income? 7.85 0.974
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![### Financial Ratios Comparison
The following financial ratios from Walmart, Target, and Dollar General are provided to analyze and answer Questions 12-13.
#### Ratio Analysis
| Ratio | Walmart | Target | Dollar General |
|---------------------------------|---------|--------|----------------|
| **Liabilities-to-equity ratio** | 1.246 | 1.275 | 1.17 |
| **Times interest earned** | 11.49 | 15.11 | 7.85 |
| **Cash from operations to total debt** | 0.787 | 0.447 | 0.974 |
#### Question:
Based on the information given, which of the three companies is better able to cover its interest expense with current income?
- [ ] Target
- [ ] Walmart
- [ ] This cannot be determined based on the information given
- [ ] Dollar General
**Note:** This data is used to facilitate understanding of financial stability and performance comparisons between major retail companies. Consider the “Times interest earned” ratio, which indicates the company’s ability to meet interest expenses. A higher ratio suggests a better capacity to cover interest.
Points: 1.33 pts](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F645d3812-7d52-4625-bce8-b31a65c63b18%2Fdfddba56-2f7e-43ed-b133-48c694b56289%2F3nghkzh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Financial Ratios Comparison
The following financial ratios from Walmart, Target, and Dollar General are provided to analyze and answer Questions 12-13.
#### Ratio Analysis
| Ratio | Walmart | Target | Dollar General |
|---------------------------------|---------|--------|----------------|
| **Liabilities-to-equity ratio** | 1.246 | 1.275 | 1.17 |
| **Times interest earned** | 11.49 | 15.11 | 7.85 |
| **Cash from operations to total debt** | 0.787 | 0.447 | 0.974 |
#### Question:
Based on the information given, which of the three companies is better able to cover its interest expense with current income?
- [ ] Target
- [ ] Walmart
- [ ] This cannot be determined based on the information given
- [ ] Dollar General
**Note:** This data is used to facilitate understanding of financial stability and performance comparisons between major retail companies. Consider the “Times interest earned” ratio, which indicates the company’s ability to meet interest expenses. A higher ratio suggests a better capacity to cover interest.
Points: 1.33 pts
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