Blue sky drone debt management ratios

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Blue Sky Drone Company has a total asset turnover ratio of 6.00x, net annual sales of $25 million, and operating expenses of $11 million (including depreciation and amortization). On its balance sheet and income statement, respectively, it reported total debt of $2.50 million on which it pays a 11% interest rate.To analyze a company's financial leverage situation, you need to measure the firm's debt management ratios. Based on the preceding information, what are the values for Blue Sky Drone's debt management ratios?

Ratio

Value

Debt ratio

?

Times-interest-earned ratio

?

Influenced by a firm's ability to make interest payments and pay back its debt, if all else is equal, creditors would prefer to give loans to companies with ______(Low/high) times-interest-earned ratios (TIE).

Reference no: EM133116639

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