Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Two online travel companies, E-Travel and Pricecheck, provide the following selected financial data: Total assets Total liabilities Total stockholders' equity Sales revenue Interest expense Income

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

image text in transcribed

Total assets Total liabilities Total stockholders' equity Sales revenue Interest expense Income tax expense Net income Required: E-Travel $ 6,837,156 3,854,475 2,982,681 Pricecheck $ 1,990,224 482,610 1,507,614 $ 3,255,426 $ 2,638,212 90,233 30,084 166,400 53,168 311,526 501,472 1-a. Calculate the debt to equity ratio for E-Travel and Pricecheck. 1-b. Which company has higher leverage risk? 2-a. Calculate the times interest earned ratio for E-Travel and Pricecheck. 2-b. Which company is better able to meet interest payments as they become due? Complete this question by entering your answers in the tabs below. Req 1a Req 1b Req 2a Req 2b E-Travel Calculate the times interest earned ratio for E-Travel and Pricecheck. (Round ratios to 1 decimal place.) Times Interest Earned Ratio Numerator/Denominator Net income + Income tax expense Average total assets Amounts $ 477,926 ... 0.1 $ 6,837,156 Net income + Income tax expense EA $ 554,640 Pricecheck 0.3 Average total assets $ 1,990,224 < Req 1b Req 2b >

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Cost Accounting

Authors: Edward J. Vanderbeck

15th Edition

978-0840037039, 0840037031

More Books

Students also viewed these Accounting questions