Question

Financial data ($ thousands) for Wisconsin Wilderness, Inc., are reproduced below:
Short-term liabilities. . . . $ 500
Long-term liabilities . . . . 800
Equity capital . . . . . . . . . 1,200
Cash from operations . . . 300
Pretax income . . . . . . . . . 200
Interest expense . . . . . . . 40
Indicate the effect that each of the Wisconsin Wilderness transactions and events (1 through 10) below has on each of the four ratios below. (Each transaction or event is independent of others—consider only the immediate effect.) Use I for increase, D for decrease, and NE for no effect.


a. Total debt to equity.
b. Long-term debt to equity.
c. Earnings to fixed charges (exceeds 1.0 before transactions and events).
d. Cash flow to fixed charges (exceeds 1.0 before transactions andevents).


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  • CreatedJanuary 22, 2015
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