Answered step by step
Verified Expert Solution
Question
1 Approved Answer
You are comparing two company's leverage ratios. Which of the following statements is correct? Company X Company Y Debt/Equity 2.48 1.36 Interest Coverage 4.85 5.95
You are comparing two company's leverage ratios. Which of the following statements is correct?
Company X | Company Y | |
Debt/Equity | 2.48 | 1.36 |
Interest Coverage | 4.85 | 5.95 |
Group of answer choices
a.Company X has a strength in leverage ratios since it uses more debt and has lower ability to pay interest expense.
b,Company Y has a strength in leverage ratios since it uses less debt and has higher ability to pay interest expense.
.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started