These ratios provide indirect information on

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Unformatted text preview: financial leverage) that is acceptable for one industry or line of business can be highly risky in another, because different industries and lines of business have different operating characteristics. Table 11.8 presents the debt and times interest earned ratios for selected industries and lines of business. Significant industry differences can be seen in these data. Differences in debt positions are also likely to exist within an industry or line of business. TABLE 11.8 Debt Ratios for Selected Industries and Lines of Business (Fiscal Years Ended 4/1/00 Through 3/31/01) Debt ratio Times interest earned ratio Books 65.2% 3.3 Dairy products 74.6 3.0 Electronic computers 55.4 3.4 Iron and steel forgings 62.7 2.3 Machine tools, metal cutting types 60.4 2.4 Wines & distilled alcoholic beverages 69.7 4.4 Women’s, misses’ & juniors’ dresses 53.5 2.4 Furniture 69.4 3.0 General groceries 66.8 2.8 Men’s and boys’ clothing 60.8 2.6 76.1 1.4 Industry or line of business Manufactur...
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