A). All other things being equal, the lower a company's debt to assets or debt...
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Accounting
A). All other things being equal, the lower a company's debt to assets or debt to equity ratios, the greater its borrowing capacity. This statement is true or false?
B). The following information was drawn from the accounting records of Woo Company.
| Current assets | $ | 50,000 | |
| Long-term assets (Plant assets) | 350,000 | ||
| Current liabilities | 40,000 | ||
| Long-term liabilities | 100,000 | ||
| Stockholders' Equity | 260,000 | ||
| Earnings before interest and taxes | 60,000 | ||
| Interest expense | 15,000 |
|
Based on this information, the company's times interest earned measure is (round your answer to two decimal places.)
Multiple Choice
a. 4.33 times.
b. 6.66 times.
c. 2.50 times.
d. 4.00 times.
C). The higher a company's plant assets to long-term liabilities ratio, the greater its borrowing capacity. This statement is true or false?
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