Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. analysis of debt ratios financial information from

Analysis of debt ratios Financial information from fiscal year 2016 for two companies competing in...

90.2K

Verified Solution

Question

Finance

image

Analysis of debt ratios Financial information from fiscal year 2016 for two companies competing in the cosmetics industry The Estee Lauder Company and e.l.f. Beauty Inc.appears in the table below. All dollar values are in thousands Estee Lauder e.l.f. Beauty Total assets $9,223,500 $414,929 Total liabilities 5,636,000 273,767 EBIT 1,626,100 26,295 Interest expense 70,600 16,383 a. Calculate the debt ratio and the times interest earned ratio for each company. In what way are these companies similar in terms of their debt usage, and in what way are they very different? b. Calculate the ratio of interest expense to total liabilities for each company. Conceptually, what do you think this ratio is trying to measure? Why are the values of this ratio dramatically different for these two firms? Suggest some reasons

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students