Given the following information, evaluate the solvency of this company:

Total assets $361,000 Total liabilities $120,800 Net income before interest or taxes $14,600 Interest expense $8,250 Industry standard debt ratio (debt to total assets) = 50% Industry standard times interest earned = 3.5

Question

Given the following information, evaluate the solvency of this company: 
 
 Total assets $361,000 Total liabilities $120,800 Net income before interest or taxes $14,600 Interest expense $8,250 Industry standard debt ratio (debt to total assets) = 50% Industry standard times interest earned = 3.5

Answer

The company has more assets financed by equity than industry standard, and is in a relatively worse position to pay its borrowing costs

Answer

The company is less leveraged than industry standard, but is relatively better positioned to meet its debt payments

Answer

The company is more highly leveraged than industry standard, and in a relatively worse position to pay its borrowing costs

Answer

The company is more highly leveraged than industry standard, but is relatively better positioned to meet its debt payments

Crowdly

Given the following information, evaluate the solvency of this company: Tota...

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