Calculate the debt-to-equity ratio and times interest earned ratio for the company for the latest two years.
Prior to beginning work on this discussion forum, read Chapter 10 in the course textbook, Using Financial Accounting Information: The Alternative to Debits and Credits.
Using the same company and annual reports that you chose for your Week 1 – Discussion Forum, Reading and Using the Annual Report Case Study,
Calculate the debt-to-equity ratio and times interest earned ratio for the company for the latest two years. Obtain the industry averages for these ratios and any other pertinent information from IBISWorld, and then analyze the results.
Discuss what each of these ratios tells you about the company’s use of debt and how it compares to the industry average.
Identify the major causes of any changes in these ratios and discuss your assessment of the company based on these changes.
If you were a lender, discuss whether you would you be willing to lend money to the company based on its use of debt.
Your initial response should be a minimum of 200 words. Graduate school students learn to assess the perspectives of several scholars. Support your response with at least one scholarly and/or credible resource, in addition to the text.
Answer preview to calculate the debt-to-equity ratio and times interest earned ratio for the company for the latest two years.
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