You are provided the following information about two companies, Lombardy Ltd. and Savona Inc. a. Calculate the

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You are provided the following information about two companies, Lombardy Ltd. and Savona Inc.

a. Calculate the debt-to-equity ratio and the interest coverage ratio for each company.

b. Which company do you think would be considered a safer investment by a long term lender?Explain.

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Financial Accounting A Critical Approach

ISBN: 978-1259066528

4th edition

Authors: John Friedlan

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Question Posted: Feb 26, 2015 11:44 AM

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You are provided the following information about two companies, Lombardy Ltd. and Savona Inc. a. Calculate the

Question:

Total assets Total liabilities Total shareholders' equity Net income Income tax expense Interest expense Lombardy Ltd. $9,250,000 3,450,000 5,800,000 400,000 Savona Inc. $12,358,000 7,100,000 5,258,000 1,250,000 220,588 331,333 70,588 161,000

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a DebttoEquity Ratio total liabilities total shareholders equity Interest Coverage Ratio net income ...View the full answer

Financial Accounting A Critical Approach

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