12-11A. (Assessing Leverage Use) Some financial data for three corporations are displayed below:
Measure Firm A Firm B Firm C Norm
Debt ratio 15% 20% 35% 25%
Times burden covered 9 times 11 times 6 times 9 times
Price/earnings ratio 10 times 12 times 5 times 10 times
a. Which firm appears to be excessively levered?
b. Which firm appears to be employing financial leverage to the most appropriate degree?
c. What explanation can you provide for the higher price/earnings ratio enjoyed by firm B as compared with firm A?
Recently Asked Questions
- 1)Consider a ligand like a neurotransmitter binding to a receptor like in a synapse. This is a simple system: L + R< > LR Which is governed by the forward rate
- If the volume of a container is increased, the pressure of the gas in the container also increases (when the amount of gas and temperature are held constant).
- Choose your top 2 HR areas of interest that you would like to discuss with an HR professional Create 10 interview questions for each area of interest