Company 1	Company 2	Company 3
EBIT interest coverage	16.7	2.7	12.8
EBITDA interest coverage	24.6	3.7	18.7
FFO/ Total debt	135.1	19.8	80.2
Free operating cash flow/Total debt	87.9	8.2	40.6
Total debt/EBITDA	0.3	4.0	1.0
Return on capital	32.7	9.9	29.2
Total debt/Capital	8.1	54.8	30.2

requirements:

2. What credit rating would be assigned to company 1? 
4. What credit rating would be assigned to company 2? 
6. Does company 3 have a greater or lower credit risk than company 2? How can you know?

Answer rating: 100% (QA)

To assess the credit rating of the companies based on the provided financial ratios we need to consi... View the full answer