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Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962 Exercise 33
Leverage Ratios
Mike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture of office supplies. To be able to assess the financial capabilities of the company, Mike has been given the company's financial statements for the 2 most recent years.
Refer to the information for Kepler Company above.
Required:
Note : Round all answers to two decimal places.
1. Compute the following for each year: (a) the times-interest-earned ratio and (b) the debt ratio
2. CONCEPTUAL CONNECTION Does Kepler have too much debt? What other information would help in answering this question?
Mike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture of office supplies. To be able to assess the financial capabilities of the company, Mike has been given the company's financial statements for the 2 most recent years.
Refer to the information for Kepler Company above.
Required:
Note : Round all answers to two decimal places.
1. Compute the following for each year: (a) the times-interest-earned ratio and (b) the debt ratio
2. CONCEPTUAL CONNECTION Does Kepler have too much debt? What other information would help in answering this question?
Explanation
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Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
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