quick answer

Mr. John has asked you to advise him on the long-term debt-paying ability of the Aero Company. He provides you with the following ratios: 2011 2010 2009 Times interest earned 8.2 6.0 5.5 Debt ratio 40% 39% 40% Debt to tangible net worth 80% 81% 81% Required A. Give the implications and the limitations of each item separately and then the collective influence that could be drawn from them about the Aero Company's long-term debt position. (Marks 2.5) B. What warnings should you offer Mr. John about the limitations of ratio analysis for the purpose stated here? (Marks 2.5)