What can be interpreted on the capital structure of both companies (based on the debt and equity). What could be causing the difference in capital structure for both companies?

 

1) b) Do both companies have a good better capital? If yes, why? If no, what can they do to improve? 2) What can be interpreted from the time interest earned ratio? Do let me know if further resources are required.

Company A (2021): 50.84%

Company A (2022): 50.13%

Company B (2021): 35.28% Company B (2022): 32.61%

Debt ratio

Company A (2021): 49.16%

Company A (2022): 49.87%

Company B (2021): 64.72% Company B (2022): 67.39%

Time Interest Earned Ratio

Company A (2021): 20.239

Company A (2022): 8.79

Company B (2021): -6.977 Company B (2022): -2.174