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Q 12.24: A financial analyst is comparing Peachtree Manufacturing to its industry. Their interest coverage ratios are presented below. RATIO 2009 2010 2011 2012 2013
Q 12.24: A financial analyst is comparing Peachtree Manufacturing to its industry. Their interest coverage ratios are presented below. RATIO 2009 2010 2011 2012 2013 Interest coverage Peachtree 7.34 7.91 6.05 5.68 5.23 Industry 6.89 6.34 6.06 5.60 5.22 What can be concluded from this information? A The industry's operating profit has increased relative to its interest payments over the years. B Peachtree's interest payments have decreased relative to its operating profit over the years. Peachtree, in general, has been in a slightly worse position than the industry in terms of a safety margin related to interest payments. D Peachtree, in general, has been in a slightly better position than the industry in terms of a safety margin related to interest payments
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