You are provided the following information about two companies, Naicam Ltd. and Riverton Inc. Required: a. Calculate

Question:

You are provided the following information about two companies, Naicam Ltd. and Riverton Inc.

Required:
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 11:43 AM

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You are provided the following information about two companies, Naicam Ltd. and Riverton Inc. Required: a. Calculate

Question:

Total assets Total liabilities Total shareholders' equity Net income Income tax expense Interest expense Naicam Ltd. S2,758,000 1,950,000 808,000 352,000 62,118 175,000 Riverton Inc. $8,750,000 4,875,000 3,875,000 1,015,000 179,118 221,000

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a DebttoEquity Ratio total liabilities total shareholders equity Interest Coverag...View the full answer

Financial Accounting A Critical Approach

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