
Concept Introduction:
Debt to Equity Ratio:
The financial ratio that compare the total debt of the company to its total equity refers to debt-to-equity ratio. The ratio represents the capital contributed by the shareholders and creditors of the company. Debt-to-equity-ratio indicates the financial soundness of the company.
Requirement 1:
To Calculate:
The debt to equity ratio for the company Paddy's Pub to measure the financial stability of the company.
Concept Introduction:
Requirement 2:
Times interest earned:
The debt ratio that measures the efficiency of the company to meet its interest expense due refers to the times interest earned ratio. It is also known as interest coverage ratio that indicates the capability of the company to meet its annual interest expenses using its net operative income.
To Calculate:
The time interest earned for Paddy's Pub for the year to measure its ability to meet its debt obligations.

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Chapter 17 Solutions
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