Essay
The balance sheets and income statements for two competing companies in the same industry are presented below: 
Instructions
a. Calculate both companies' Debt to Total Assets ratio.
b. Calculate both companies' Interest Coverage ratio.
c. Comment on the two companies' solvency in comparison to each other.
d. One of the companies is a public company, and the other is a private company. Identify which of the two companies appears to be the public company and explain your conclusion. Describe how that affects the extent to which it is financed by debt in comparison to the other company.
Correct Answer:
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a. Company L ($30,000 + $300,000) ÷ $700...View Answer
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Correct Answer:
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