Analyze the trends and factors that determine Astro Berhad Malaysia in 2022 that need for the debt financing instead of equity financing due to high debt to equity ratio by relating to the following points.Debt Level: ASTRO's net debt to equity ratio (90.1%) is considered high.Reducing Debt: ASTRO's debt to equity ratio has reduced from 426.8% to 152.6% over the past 5 years.Debt Coverage: ASTRO's debt is well covered by operating cash flow (75%).Interest Coverage: ASTRO's interest payments on its debt are well covered by EBIT (5.2x coverage). 4.2 Debt to Equity History and AnalysisRM4bRMO2016● Debt● Equity20172018● Cash And EquivalentsJan 31 2022DebtEquityCash And Equivalents20192020RM1.935bRM1.204b160.7% Debt/Equity RatioRM743.973m20212022

The debt to equity ratio, also known as the "debt-equity ratio," "risk ratio," or "gearing," is a…

Answered: Analyze the trends and factors that…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Analyze the trends and factors that determine Astro Berhad Malaysia in 2022 that need for the debt financing instead of equity financing due to high debt to equity ratio by relating to the following points.

Debt Level: ASTRO's net debt to equity ratio (90.1%) is considered high.
Reducing Debt: ASTRO's debt to equity ratio has reduced from 426.8% to 152.6% over the past 5 years.
Debt Coverage: ASTRO's debt is well covered by operating cash flow (75%).
Interest Coverage: ASTRO's interest payments on its debt are well covered by EBIT (5.2x coverage).

4.2 Debt to Equity History and Analysis
RM4b
RMO
2016
● Debt
● Equity
2017
2018
● Cash And Equivalents
Jan 31 2022
Debt
Equity
Cash And Equivalents
2019
2020
RM1.935b
RM1.204b
160.7% Debt/Equity Ratio
RM743.973m
2021
2022

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