What can be interpreted on the capital structure of both companies (based on the debt and equity).
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What can be interpreted on the capital structure of both companies (based on the debt and equity). What could be causing the difference in capital structure for both companies?
1) b) Do both companies have a good better capital? If yes, why? If no, what can they do to improve? 2) What can be interpreted from the time interest earned ratio? Do let me know if further resources are required.
Company A (2021): 50.84%
Company A (2022): 50.13%
Company B (2021): 35.28% Company B (2022): 32.61%
Debt ratio
Company A (2021): 49.16%
Company A (2022): 49.87%
Company B (2021): 64.72% Company B (2022): 67.39%
Time Interest Earned Ratio
Company A (2021): 20.239
Company A (2022): 8.79
Company B (2021): -6.977 Company B (2022): -2.174
Expert Answer:
Based on the provided data 1 Interpretation of Capital Structure Company A has a higher equity ratio compared to Company B in both 2021 and 2022 This ... View the full answer
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