Debt Ratio Debu Equity Ratio Ratio Transaction P 7-5 Individual transactions often have a significant impact on ratios. This problem will consider the direction of such an impact. Times Interest Earned Debt to Tangible Archase of buildings financed by mortgage. Net Worth Rechase of inventory on short-term loan at Auslaration and payment of cash dividend. darabon and payment of stock dividend. him increases profits by cutting cost of sales. Agropriation of retained earnings. 1% over prime rate. soke of common stock Liepayment of long-term bank loan. outstanding. Conversion of bonds to common stock Sale of inventory at greater than cost. Required Indicate the effect of each of the transactions on the ratios listed. Use + co indicat an increase, to indicate a decrease, and 0 to indicate no effect. Assume an initial times i terest earned of more than 1, and a debt ratio, debt/equity ratio, and a total debt to tangi net worth of less than 1. ined you to advise him on the long-term debt-paying tips