You are provided the following information about two companies, Lombardy Ltd. and Savona Inc. a. Calculate the
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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.
Transcribed Image Text:
Total assets Total liabilities Total shareholders' equity Net income Income tax expense Interest expense Lombardy Ltd. $9,250,000 3,450,000 5,800,000 400,000 Savona Inc. $12,358,000 7,100,000 5,258,000 1,250,000 220,588 331,333 70,588 161,000
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