Concept explainers
(a) 1.
Financial Ratios: Financial ratios are the metrics used to evaluate the overall financial performance of a company during a specific period of time.
To Calculate: the return on assets ratio for 2017 and 2016.
2.
To Calculate: the return on common
3.
To Calculate: the payout ratio for 2017 and 2016.
4.
To Calculate: the debt to assets ratio for 2017 and 2016.
5.
To Calculate: the times interest earned ratio for 2017 and 2016.
(b)
To discuss: the changes in the company’s profitability from 2016 to 2017.
(c)
To discuss: the changes in the company’s solvency from 2016 to 2017.
(d)
To explain: whether the decision to issue debt to purchase common stock was wise.

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Chapter 11 Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
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