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Two online travel companies, E-Travel and Pricecheck, provide the following selected financial data: Total assets Total liabilities E-Travel $ 6,237,156 Total stockholders' equity 3,454,475
Two online travel companies, E-Travel and Pricecheck, provide the following selected financial data: Total assets Total liabilities E-Travel $ 6,237,156 Total stockholders' equity 3,454,475 2,782,681 Sales revenue $ 3,055,426 Interest expense Income tax expense 86,233 158,400 303,526 Net income Required: Pricecheck $ 1,886,224 478,610 1,407,614 $ 2,438,212 26,084 49,168 493,472 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?
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