Two online travel companies, E-Travel and Pricecheck, provide the following selected financial data: E-TravelPricecheckTotal assets$ 4,437,156$ 1,574,224Total liabilities2,254,475466,610Total stockholders’ equity2,182,6811,107,614Sales revenue$ 2,455,426$ 1,838,212Interest expense74,23314,084Income tax expense134,40037,168Net income279,526469,472Required:1-a. Calculate the debt to equity ratio for E-Travel and Pricecheck.1-b. Which company has higher leverage risk?2-a. Calculate the times interest earned ratio for E-Travel and Pricecheck.2-b. Which company is better able to meet interest payments as they become due? Complete this question by entering your answers in the tabs below.Req laReq 1bReq 2aReq 2bCalculate the times interest earned ratio for E-Travel and Pricecheck. (Round ratios to 1 decimal place.)Times Interest Earned RatioNumerator/DenominatorAmountsE-TravelPricecheckReq 1bReq 2b>Drov4 of 7NovtII Complete this question by entering your answers in the tabs below.Req laReq 1bReq 2aReq 2bCalculate the debt to equity ratio for E-Travel and Pricecheck. (Round ratios to 2 decimal plaDebt to Equity RatioNumerator/DenominatorAmountsE-TravelPricecheck%3DReq laReq 1b

Solution:- 1-a)Calculation of the debt to equity ratio for E-Travel and Price check as follows…

Two online travel companies, E-Travel and Pricecheck, provide the following selected financial data: E-Travel Pricecheck Total assets $ 4,437,156 $ 1,574,224 Total liabilities 2,254,475 466,610 Total stockholders’ equity 2,182,681 1,107,614 Sales revenue $ 2,455,426 $ 1,838,212 Interest expense 74,233 14,084 Income tax expense 134,400 37,168 Net income 279,526 469,472 Required: 1-a. Calculate the debt to equity ratio for E-Travel and Pricecheck. 1-b. Which company has higher leverage risk? 2-a. Calculate the times interest earned ratio for E-Travel and Pricecheck

Two online travel companies, E-Travel and Pricecheck, provide the following selected financial data: E-Travel Pricecheck Total assets $ 4,437,156 $ 1,574,224 Total liabilities 2,254,475 466,610 Total stockholders’ equity 2,182,681 1,107,614 Sales revenue $ 2,455,426 $ 1,838,212 Interest expense 74,233 14,084 Income tax expense 134,400 37,168 Net income 279,526 469,472 Required: 1-a. Calculate the debt to equity ratio for E-Travel and Pricecheck. 1-b. Which company has higher leverage risk? 2-a. Calculate the times interest earned ratio for E-Travel and Pricecheck

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter17: Financial Statement Analysis

Section: Chapter Questions

Problem 1AP

See similar textbooks

	E-Travel	Pricecheck
Total assets	$ 4,437,156	$ 1,574,224
Total liabilities	2,254,475	466,610
Total stockholders’ equity	2,182,681	1,107,614
Sales revenue	$ 2,455,426	$ 1,838,212
Interest expense	74,233	14,084
Income tax expense	134,400	37,168
Net income	279,526	469,472

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