(a)
Concept Introduction:
Debt ratio: Debt ratio measures the percentage of shares financed by debt, the higher debt ratio is considered riskier for the business, because a higher debt ratio indicates a larger portion of assets are funded by external debt, it is computed as total liabilities divided by the total of assets.
The HD’s Debt ratio.
(b)
Concept Introduction:
Debt ratio:
Debt ratio measures the percentage of shares financed by debt, the higher debt ratio is considered riskier for the business, because higher debt ratio indicates a larger portion of assets are funded by external debt, it is computed as total liabilities divided by the total of assets.
The risky ness of the company when compared with the competitor’s debt ratio.
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FINANCIAL & MANAGERIAL ACCOUNTING
- Vihat Tech is considering a project that will produce incremental annual sales of $250,000 and increase cash expenses by $160,000. If the project is implemented, taxes will increase from $29,000 to $33,000. The company is debt-free. What is the amount of the operating cash flow using the top-down approach? I want Answerarrow_forwardAt the end of last year, Harvey, a 25% partner in the four-person HRT partnership, had an outside basis of $28,000, which included his $12,000 share of HRT's debt. On January 1 of the current year, Harvey sells his partnership interest to Samuel for a cash payment of $20,000 and the assumption of his share of HRT's debt. HRT has no hot assets. What is the amount and character of Harvey’s recognized gain or loss on the sale? A. $4,000 capital loss B. $4,000 ordinary loss C. $4,000 capital gain D. $8,000 ordinary income answerarrow_forwardKindly help me with accounting questionsarrow_forward
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT