Selected financial data for these two close competitors in the home building industry are provided below: ($ in millions) Company A Company B Total assets $40,930 $33,000 Total liabilities 21,500 13,990 Total stockholders' equity 19,430 19,010 Sales $66,174 $47,240 Interest expense 700 350 Tax expense 1,390 1,070 Net income 2,610 1,790 1-a. Calculate the debt to equity ratio for Company A and Company B. (Round your answers to 2 decimal places.) Debt to Equity Ratio Company A Company B 1-b. Which company has the higher ratio? Company A Company B 2-a. Calculate the times interest earned ratio for Company A and Company B. (Round your answers to 1 decimal place.) Time Interest Earned Ratio Company A times Company B times 2-b. Which company is better able to meet interest payments as they become due? Company A Company B
Selected financial data for these two close competitors in the home building industry are provided below: ($ in millions) Company A Company B Total assets $40,930 $33,000 Total liabilities 21,500 13,990 Total stockholders' equity 19,430 19,010 Sales $66,174 $47,240 Interest expense 700 350 Tax expense 1,390 1,070 Net income 2,610 1,790 1-a. Calculate the debt to equity ratio for Company A and Company B. (Round your answers to 2 decimal places.) Debt to Equity Ratio Company A Company B 1-b. Which company has the higher ratio? Company A Company B 2-a. Calculate the times interest earned ratio for Company A and Company B. (Round your answers to 1 decimal place.) Time Interest Earned Ratio Company A times Company B times 2-b. Which company is better able to meet interest payments as they become due? Company A Company B
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter4: The Accounting Cycle
Section: Chapter Questions
Problem 2MAD: Analyze and compare Zynga, Electronic Arts, and Take-Two Data (in millions) from recent financial...
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Selected financial data for these two close competitors in the home building industry are provided below:
| ($ in millions) | Company A | Company B |
| Total assets | $40,930 | $33,000 |
| Total liabilities | 21,500 | 13,990 |
| Total |
19,430 | 19,010 |
| Sales | $66,174 | $47,240 |
| Interest expense | 700 | 350 |
| Tax expense | 1,390 | 1,070 |
| Net income | 2,610 | 1,790 |
1-a. Calculate the debt to equity ratio for Company A and Company B. (Round your answers to 2 decimal places.)
|
1-b. Which company has the higher ratio?
-
Company A
-
Company B
2-a. Calculate the times interest earned ratio for Company A and Company B. (Round your answers to 1 decimal place.)
Time Interest Earned Ratio Company A times Company B times 2-b. Which company is better able to meet interest payments as they become due?
-
Company A
-
Company B
-
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