Exercise 9-20A Calculate and analyze ratios (LO9-8)

Two online travel companies, E-Travel and Pricecheck, provide the following selected financial data:

($ in thousands)	E-Travel				Pricecheck
Total assets	$	5,337,156			$	1,730,224
Total liabilities		2,854,475				472,610
Total stockholders equity		2,482,681				1,257,614
Sales revenue	$	2,755,426			$	2,138,212
Interest expense		80,233				20,084
Tax expense		146,400				43,168
Net income		291,526				481,472

Required: 1-a. Calculate the debt to equity ratio for E-Travel and Pricecheck. (Enter dollar answers in thousands of dollars and round ratios to 2 decimal places.)

1-b. Which company has the higher ratio?

• E-Travel

• Pricecheck

2-a. Calculate the times interest earned ratio for E-Travel and Pricecheck. (Enter dollar answers in thousands of dollars and round ratios to 1 decimal place.)

2-b. Which company is better able to meet interest payments as they become due?

• E-Travel

• Pricecheck