Question: So experts state that a 'good debt to equity ratio is somewhere between 1.5 - 1 to one. This means for every $1.50 of debt,

So experts state that a 'good debt to equity ratio is somewhere between 1.5 - 1 to one. This means for every $1.50 of debt, there should be $1.00 of equity. This is not a golden rule it is a best judgement of experts for an organization to be viable.

Examples: Chase bank 1.31 / 1 BOA 1.02 / 1 AMEX 2.66 Remember that debt is the way large organizations are able to invest and grow - the risk though is what accountants are needed for!!! how do you respond to this comment?

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!

Use the dependency diagram shown in Figure 6.8 to work the following problems. a. Break up the dependency diagram in Figure 6.8 to create two new dependency diagrams, one in 3NF and one in 2NF. b....

A firm has unlevered beta of 1.1, and now its debt-to-equity ratio is 0.4. What is the levered beta assuming the tax rate is 40%? Using WACC to discount free cash flows, one gets the value of the...

(1) Financial Ratios Referencing this week?s readings and lecture, what are the limitations of financial ratios? Classify your answer into at least the following categories: liquidity ratios,...

kindly assist me in this home work. Let me know if you need more information.Thank you KEY FINANCIAL STATEMENT RATIOS Liquidity ratios rev. 3-19-2010 rev. Feb 2010 Example: Current Ratio Current...

Please Assist me on doing the Excel files Required for Ford Company. The Attached files are the procedures and requirement and samples. Company Name Ticker Symbol Stock Market Head Quarters IRS...

I need help understanding this project... Submit the Ratio Analysis portion of the final project. For this milestone, you will be analyzing the financial performance of Starbucks using the financial...

True/False Indicate whether the statement is true or false. ____ 1. In accounting, to value means to record a transaction or event. ____ 2. The recognition issue deals with when a business...

1 SLA Checklist 2 ACFI - 101 3 Accounting Lab 4 5 Use the following checklist for the Financial Analysis SLA. After you are "done" with your SLA, you should run through this list. 6 If you need to go...

Please see the attached file. There is an instruction file and SGP annual report for use as reference. Also I attached the Powerpoint which is mentioned from the instruction too. MS 6405 Advance...

1. (Points: 1) With respect to a corporation, select the statement that is correct. a. Its organization requires an approved charter which is governed by state law. b. Ownership rights to the...

Review the annual reports for PepsiCo, Inc. and the Coca-Cola Company in Appendixes A & B, especially the Consolidated Statements of income and the Balance Sheets on pp. A4, A6, B1, & B2 of Financial...

The oncology program of a large medical center reported an increase in the number of pancreatic cancer cases during a given month. The hospital epidemiologist decided to investigate the problem....

Set up a spreadsheet to solve Problem 6. In Problem 6, the construction company in Problem 2 decides to act as the owner on the project. The construction company plans to sell the project for...

Find the directional derivative of the function at the given point in the direction of the vector v . h ( r , s , t ) = ln ( 3 r + 6 s + 9 t ) , ( 1 , 1 , 1 ) , v = 1 2 i + 3 6 j + 1 8 k Duh ( 1 , 1...

IF YOU LIKE TO MAKE $1419 IN 2 YEARS, HOW MUCH WOULD YOU HAVE TO DEPOSIT IN AN ACCOUNT THAT PAYS SIMPLE INTEREST OF 3%?

Bramble Corp has the following inventory data: 7/1 Beginning inventory: 29 units at $19 $551 7/7 Purchases 103 units at $20 $2060 7/22 Purchases 15 units at $22 $330 A physical count of merchandise...

A projectile is launched on the Earth with a certain initial velocity and moves without air resistance. Another projectile is launched with the same initial velocity on the Moon, where the...

14. The potential energy of a 1 kg particle free move along the x-axis is given by V(x)= 4. J. The total mechanical of the particle 2 J. Then, the maximum (2006) energy speed (in m/s) is 2) 3/2 3) 2...

Jacob always bought Polo brand shirts. He knew they were pricier than others and that he should probably shop around, but he kept buying them anyway because he felt they were more prestigious. Which...

What is the generalized other, and how does it shape personal identity?

What are the values and risks of self-disclosing communication?

Consider the ethical principles refl ected in the communication behaviors discussed in this chapter. What ethical principles underlie confi rming communication and disconfi rming communication?