Question
Company Total Assets Total Liabilities Net Income A $ 10,000,000.00 $ 1,000,000.00 $ 200,000.00 B $ 20,000,000.00 $ 3,000,000.00 $ 1,000,000.00 C $ 6,000,000.00 $
| Company | Total Assets | Total Liabilities | Net Income | |||
| A | $ 10,000,000.00 | $ 1,000,000.00 | $ 200,000.00 | |||
| B | $ 20,000,000.00 | $ 3,000,000.00 | $ 1,000,000.00 | |||
| C | $ 6,000,000.00 | $ 4,000,000.00 | $ 250,000.00 | |||
| D | $ 15,000,000.00 | $ 6,000,000.00 | $ 1,600,000.00 | |||
| $ 30,000,000.00 | $ 22,000,000.00 | $ 4,000,000.00 | ||||
Mr. Joseph has identified five different companies he is interested in investing, however he has some concerns over the economy and want to invest in companies with the lowest debt exposure. The above information is available.
Based on the data provided
1. Calculate the debt to asset ratio and rank the investment based on the least risky to most risky
2. Explain the logic of your analysis
3. Briefly explain the times earned interest and how it would ne used in your analysis.
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Ethical Obligations and Decision Making in Accounting Text and Cases
Authors: Steven Mintz, Roselyn Morris
4th edition
978-1259543470, 1259543471, 978-1259730191
