Question: Please answer please give thumbs up! Debt ratio measure the proportion of total assets financed by a hm Green Caterpillar Garden Supplies Inc. has a
Debt ratio measure the proportion of total assets financed by a hm Green Caterpillar Garden Supplies Inc. has a debt-to-equity ratio of 3.40, compared to the industry average of 4.08. Its competitor Peaceful Greens and Gardens, however, has a debt-to-equity ratio of 2.72. Based on what debt-to-equity ratios imply, which of the following statements is true? OPGSG has a greater risk of bankruptcy than Green Caterpillar. O Green Caterpillar has greater financial risk as compared to PG&G but lower than the average financial risk in the industry. OPGSC creditors tace higher risk than the average financial risk in the industry. Green Caterpillar has higher creditworthiness as compared to PGG Suppose the stock price of Green Caterpillar Garden Supplies Inc. falls by 10%. What impact will it have on its market debt ratio if nothing changes in the company's balance sheet? The market debt ratio will decrease, reflecting a decrease in the financial risk of the company, The market debt ratio will increase, reflecting a decrease in the financial risk of the company. The market debt ratio will increase, reflecting an increase in the financial risk of the company, The market debt ratio will decrease, reflecting an increase in the financial risk of the company. Data Collected (Millions of dollars) EBITDA Interest payments Principal payments Lease payments Year 1 5150 $15 $12 57 Green Caterpillar Garden Supplies Inc. reported the following figures in its annual report, Based on the information, Green Caterpillar Garden Supplies Inc. has the ability to cover its foxed financial charges times
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