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A banker is reviewing the banks current portfolio of outstanding loans and collected the following financial data (in thousands) on four companies that the bank
A banker is reviewing the banks current portfolio of outstanding loans and collected the following financial data (in thousands) on four companies that the bank has loaned money to.
Company A | Company B | Company C | Company D | |||||
| | | | |||||
Earnings before interest and income taxes | 5,000 | 12,500 | 4,300 | 2,450 | ||||
Interest expense | 3,950 | 9,000 | 2,675 | 1,250 |
On the basis of the information provided above, which company has the highest relative likelihood of defaulting on an outstanding loan?
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