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A manufacturing company's financials reveal the following ratios: Ratio/Calculation 2016 2015 2014 2013 2012 Industry Ave. Debt Ratio 40.0% 42.0% 46.0% 45.0% 45.0% 52.0% Times Interest Earned 7.1 7.1 7.1 6.9 6.9 7.1 Fixed Charge Coverage 5.4 5.4 5.9 6.9 6.9 6.5 Financial Leverage Ratio 1.7 1.7 1.9 1.8 1.8 2.1 Based...

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Finance

A manufacturing company's financials reveal the followingratios:

Ratio/Calculation

2016

2015

2014

2013

2012

Industry Ave.

Debt Ratio

40.0%

42.0%

46.0%

45.0%

45.0%

52.0%

Times Interest Earned

7.1

7.1

7.1

6.9

6.9

7.1

Fixed Charge Coverage

5.4

5.4

5.9

6.9

6.9

6.5

Financial Leverage Ratio

1.7

1.7

1.9

1.8

1.8

2.1

Based on your review of this company's debt paying abilityratios and their comparison to the industry,

averages comment on this company's debt-paying ability andfinancial leverage position.

Answer & Explanation Solved by verified expert
3.8 Ratings (413 Votes)
Answer Debtpaying ability Times Interest Earned Although in the past companys Times Interest Earned ratio was 69 it has improved the same over last 3 years and now it is at par with industry    See Answer
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Transcribed Image Text

A manufacturing company's financials reveal the followingratios:Ratio/Calculation20162015201420132012Industry Ave.Debt Ratio40.0%42.0%46.0%45.0%45.0%52.0%Times Interest Earned7.17.17.16.96.97.1Fixed Charge Coverage5.45.45.96.96.96.5Financial Leverage Ratio1.71.71.91.81.82.1Based on your review of this company's debt paying abilityratios and their comparison to the industry,averages comment on this company's debt-paying ability andfinancial leverage position.

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