The following selected ratios are available for Ackabe Inc. for the three most recent years: ______________________________2018................2017...............2016 Debt
Question:
The following selected ratios are available for Ackabe Inc. for the three most recent years:
______________________________2018................2017...............2016
Debt to total assets................50.0%..............45.5%.............40.3%
Times interest earned........1.8 times..........1.4 times.........1.0 times
Instructions
(a) Has the debt to total assets improved or deteriorated over these three years?
(b) Has the times interest earned improved or deteriorated over these three years? What do you think is a possible explanation for this?
(c) Overall, has the company's solvency improved or deteriorated over these three years? Explain.
SolvencySolvency means the ability of a business to fulfill its non-current financial liabilities. Often you have heard that the company X went insolvent, this means that the company X is no longer able to settle its noncurrent financial...
Step by Step Answer:
a The debt to total assets ratio has deteriorated over the past three years as the propo...View the full answer
Financial Accounting Tools for Business Decision Making
ISBN: 978-1119368458
7th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
