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Cru Company has a debt to total asset ratio of 27% and an interest coverage ratio of 3.25 times. Hue Company has a debt to
Cru Company has a debt to total asset ratio of 27% and an interest coverage ratio of 3.25 times. Hue Company has a debt to total asset ratio of 32% and an interest coverage ratio of 2 times. Based on this information, what can be determined about the solvency of Cru Company versus Hue Company?
a) Cru Company is more solvent than Hue Company
b) There is not enough information provided to reach a conclusion about the two companies solvency.
c) Cru Company is less solvent than Hue Company
d) Cru Company is just as solvent as Hue Company
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