Company 1 Company 2 Company 3 EBIT interest coverage 16.7 2.7 12.8 EBITDA interest coverage 24.6 3.7
Fantastic news! We've Found the answer you've been seeking!
Question:
Company 1 | Company 2 | Company 3 | |
EBIT interest coverage | 16.7 | 2.7 | 12.8 |
EBITDA interest coverage | 24.6 | 3.7 | 18.7 |
FFO/ Total debt | 135.1 | 19.8 | 80.2 |
Free operating cash flow/Total debt | 87.9 | 8.2 | 40.6 |
Total debt/EBITDA | 0.3 | 4.0 | 1.0 |
Return on capital | 32.7 | 9.9 | 29.2 |
Total debt/Capital | 8.1 | 54.8 | 30.2 |
requirements:
- What credit rating would be assigned to company 1?
- What credit rating would be assigned to company 2?
- Does company 3 have a greater or lower credit risk than company 2? How can you know?
Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
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