Shown below are data from recent reports of two toy makers Dollar amounts are stated in thousands Toyco Pemco Total Assets $615,132 $2,780,500 Total Liabilities $349,792 $1,105,735 Interest Expense $28,026 $39,588 Operating Income $13,028 $304,672 a Compute for each company (1) the debt ratio and (2) the interest coverage ratio (Round the debt ratio to the nearest percent and the interest coverage ratio to two decimal places )

The Answer is in the image, click to view ...

Question: Shown below are data from recent reports of two toy makers. Dollar amounts are stated in thousands. Toyco Pemco Total Assets $615,132 $2,780,500 Total Liabilities

Shown below are data from recent reports of two toy makers. Dollar amounts are stated in thousands.

	Toyco	Pemco
Total Assets	$615,132	$2,780,500
Total Liabilities	$349,792	$1,105,735
Interest Expense	$28,026	$39,588
Operating Income	$13,028	$304,672

a. Compute for each company (1) the debt ratio and (2) the interest coverage ratio. (Round the debt ratio to the nearest percent and the interest coverage ratio to two decimal places.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Your company produces cookies in a two-step process. The Mixing Division prepares the cookie dough and transfers it to the Baking Division, which bakes the cookies and packs all finished cookies for...

Cash LO2 BRIEF EXERCISE 10.1 Jacobs Company borrowed $1,000,000 on a one-year, percent note payable from the local bank on 1 April. Interest was paid quarterly, and the note was re- paid one year...

Shown below are data from recent reports of two toy makers. Dollar amounts are stated in thousands. Toyco Pemco Total assets $ 615,132 $ 2,780,500 Total liabilities 349,792 1,105,735 Interest expense...

Shown below are data from recent reports of two toy makers. Dollar amounts are stated in thousands. 1610-9 ERCISE 10.11 Sarety of Creditors' Claims Toyco Pemco Total assets . $615,132 $2,780,500...

Shown below are data from recent reports of two toy makers. Dollar amounts are stated in thousands. Toyco Playco Total assets $ 615,132 $ 2,616,388 Total liabilities 349,792 1,090,776 Interest...

Shown below are data from recent reports of two toy makers. Dollar amounts are stated in thousands. a. Compute for each company (1) The debt ratio and (2) The interest coverage ratio. b. In your...

6. Notes to financial statements ? describe those notes your team feels would most likely affect an investor?s decisions 7. Independent auditor?s report a. Who is responsible for the preparation and...

Hello Ruchi, I hope you have been doing good! I have attached the instructions word document and the excel workbook for part 5. This is the continuation from part 4. Please let me know if you have...

Hello, Need help with the following:Please see Rubric thks Using information from"Are You Paying Too Much for That Acquisition?" List and describe the components used to calculate synergy value....

1. Calculate the cost of each capital component, after-tax cost of debt, cost of preferred, and cost of equity with the DCF method and CAPM method. 2. What do you estimate the company?s WACC? Please...

CHAPTER 9 ? On Page 4 of your UBPR, locate the data for the balance sheet. You will use this data to calculate k (leverage) using ?Total Assets? (not ?Total Earning Assets?). Assume the...

The following ratios and other information are based on a company's comparative financial statements for a two-year period: Required: a. What is the amount of current liabilities at the end of 2011?...

Suppose that 91-day Treasury bills currently yield 6 percent to maturity and that 25-year Treasury bonds yield 7.25 percent. Lopez Pharmaceutical Company recently has issued long-term, 25-year bonds...

Which one of the following statements regarding delivery is true? Multiple Choice Only 1 5 % of futures contracts result in actual delivery. Futures contracts never result in actual delivery. Most...

If the following join statement is used to join two tables in a query, which of the following tables would all of the tuples in the relation appear in results? left join university.students on...