Nagell Industries has a debt-to-equity ratio of 0.75 to 1 and a times interest earned ratio of
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Nagell Industries has a debt-to-equity ratio of 0.75 to 1 and a times interest earned ratio of 10. For each transaction or change listed here, determine the effect on the debt- to- equity and times interest earned ratios. Consider each event by itself and fill in the blanks with I for increase, D for decrease, and NC for no change.
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Debt-to- Equity Times Interest Earned A. Pay long-term liability. B. Purchase equipment for cash. C. Increase gross margin percentage. D. Increase average inventory by purchasing on open account. E. Decrease operating expenses as a percentage of sales. F. Issue additional capital stock for cash G. Decrease number of units sold. H. Purchase buildings with partial payment and issue a mortgage payable for the balance
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DE TIE a Will increase earnings before interest and taxes which will ...View the full answer
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Related Book For
Introduction to Accounting An Integrated Approach
ISBN: 978-0078136603
6th edition
Authors: Penne Ainsworth, Dan Deines
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