subject
Business, 03.03.2020 00:39 TheArkazary

The key financial ratios Standard & Poor’s analysts use to assess credit risk and assign credit ratings to industrial companies. The same financial ratios for three firms follow.

Firm 1 Firm 2 Firm 3
EBIT interest coverage 2.7 12.8 16.7
EBITDA interest coverage 3.7 18.7 24.6
FFO/Total debt (%) 19.8 80.2 135.1
Free operating cash flow/Total debt (%) 8.2 40.6 87.9
Total debt/EBITDA 4.0 1.0 0.3
Return on capital (%) 9.9 29.2 32.7
Total debt/Capital (%) 54.8 30.2 8.1

Required:

a. What credit rating would be assigned to Firm 1?
b. What credit rating would be assigned to Firm 2?
c. Does Firm 3 have more or less credit risk than Firm 2?

ansver
Answers: 2

Another question on Business

question
Business, 21.06.2019 21:30
Balance sheet baggett company's balance sheet accounts and amounts as of december 31, 2016, are shown in random order as follows: account debit (credit) account debit (credit) income taxes payable $(3,800) additional paid-in capital on preferred prepaid items 1,800 stock $(7,900) additional paid-in capital on common stock (9,300) allowance for doubtful accounts (1,600) land 12,200 bonds payable (due 2020) (23,000) notes payable (due 2019) (6,000) buildings 57,400 notes receivable (due 2018) 16,400 sinking fund to retire bonds payable 5,000 accounts receivable 12,600 advances from customers (long-term) (2,600) premium on bonds payable (1,400) cash 4,300 accounts payable (13,100) accumulated depreciation: equipment (9,700) inventory 7,400 retained earnings (18,300) accumulated depreciation: buildings (21,000) preferred stock, $100 par (18,600) patents (net) 4,600 wages payable (1,400) equipment 28,700 common stock, $10 par (12,700) required: 1. prepare a december 31, 2016 balance sheet for the baggett. baggett company balance sheet december 31, 2016 assets current assets: $ $ $ long-term investments: $ property, plant, and equipment: $ $ $ intangible assets: liabilities current liabilities: $ $ long-term liabilities: $ $ other liabilities: shareholders' equity contributed capital: $ $ $ $ 2. compute the debt-to-assets ratio. round to one decimal place. do not enter a percent sign (%) as part of your answer. %
Answers: 1
question
Business, 22.06.2019 00:00
Ok, so, theoretical question: if i bought the mona lisa legally, would anyone be able to stop me from eating it? why or why not?
Answers: 1
question
Business, 22.06.2019 11:50
What is marketing’s contribution to the new product development team? a. technical expertise needed to translate designs into an actual product/service. b. deep customer insight that leads to product ideas. c. ability to assess financial viability d. feedback on design as well as how customers will actually use the product e. technical expertise needed to translate concepts into product/service designs.
Answers: 2
question
Business, 22.06.2019 13:00
Explain the relationship between consumers and producers in economic growth and activity
Answers: 1
You know the right answer?
The key financial ratios Standard & Poor’s analysts use to assess credit risk and assign credit...
Questions
Questions on the website: 13722363