The following solvency ratios are available for Fromage Corporation: ___________________________2018_______2017 Debt to total assets........................40%..............52% Times interest earned................7
Question:
___________________________2018_______2017
Debt to total assets........................40%..............52%
Times interest earned................7 times........11 times
(a) Identify whether the change in each ratio is an improvement or deterioration.
(b) Did the company's overall solvency improve or deteriorate in 2018?
Solvency
Solvency means the ability of a business to fulfill its non-current financial liabilities. Often you have heard that the company X went insolvent, this means that the company X is no longer able to settle its noncurrent financial...
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a Debt to total assets Improvement Times interest earned Deterioration b Although From...View the full answer
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Related Book For 
Financial Accounting Tools for Business Decision Making
ISBN: 978-1119368458
7th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
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