Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. the following information pertains to austin, inc.

The following information pertains to Austin, Inc. and Huston Company: Account Title Current assets Total...

90.2K

Verified Solution

Question

Accounting

image
image
image
The following information pertains to Austin, Inc. and Huston Company: Account Title Current assets Total assets Current liabilities Total liabilities Stockholders' equity Interest expense Income tax expense Net income Austin $ 70,000 420,000 21,000 280,000 250,000 17,000 34,000 82,000 Huston $ 77,500 600,000 38,750 468,000 132,000 20,000 30,000 84,500 Required a-1. Compute each company's debt-to-assets ratio, current ratio, and times interest earned (EBIT must be computed). (Round your "Debt-to-assets ratio" and "Times interest earned" to 1 decimal place and current ratio answers to 2 decimal places.) Austin Huston Debt-to-assets ratio Current ratio Times interest earned to 1.00 to 1.00 times times a-2. Which company has the greater financial risk? Debt-to-assets ratio Current ratio Times interest earned b. Compute each company's return-on-equity ratio and return-on-assets ratio. Use EBIT instead of net income when computing the return-on-assets ratio. (Round your answers to 2 decimal places.) Austin Huston Return-on-equity Return-on-assets

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