Lets consider the following simplified balance sheet and income statement. Which of the following sentences about the companys financial ratios is incorrect (i.e., most inaccurate)?

Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.

a

The current ratio (current assets/current liabilities) is about 2.72.

b

The operating margin (EBIT/Sales) of the company is about 16.2%.

c

The interest coverage ratio (EBIT/Interest Expense) is 24.4.

d

The market-to-book (M/B) ratio of the company is 7.1. (Hint: The M/B ratio is the ratio of the market value of equity to the book value of equity.)

e

The price-earnings (P/E) ratio of the companys stock is about 46.8. (Hint: P/E ratio = Market Capitalization/Net Income).