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Concept Introduction:
Debt ratio:
Debt ratio helps in measuring long-term solvency of a firm. Debt ratio shows relationship between of total liabilities and total assets.
Equity ratio:
Equity ratio helps in knowing about the percent of equity financing in overall composition of total assets. Equity ratio shows relationship between equity and total assets.
Times interest earned:
Times interest earned shows relationeship between EBIT and interest expense. This ratio helps in knowing interest paying capacity of the firm.
Requirement 1:
Debt and Equity ratio for current year & for 1 year ago.
Concept Introduction:
Debt ratio:
Debt ratio helps in measuring long-term solvency of a firm. Debt ratio shows relationship between of total liabilities and total assets.
Equity ratio:
Equity ratio helps in knowing about the percent of equity financing in overall composition of total assets. Equity ratio shows relationship between equity and total assets.
Times interest earned:
Times interest earned shows relationeship between EBIT and interest expense. This ratio helps in knowing interest paying capacity of the firm.
Requirement 2:
Debt-to-equity ratio.
Concept Introduction:
Debt ratio:
Debt ratio helps in measuring long-term solvency of a firm. Debt ratio shows relationship between of total liabilities and total assets.
Equity ratio:
Equity ratio helps in knowing about the percent of equity financing in overall composition of total assets. Equity ratio shows relationship between equity and total assets.
Times interest earned:
Times interest earned shows relationeship between EBIT and interest expense. This ratio helps in knowing interest paying capacity of the firm.
Requirement 3:
Times interest earned.
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Chapter 17 Solutions
Fundamental Accounting Principles
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