Solution-Calculate the debt ratio for east company

Calculate the debt ratio for east company

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Reference no: EM133085573

Question - Financing ratios - The data were taken from the financial records of East Company and West Company on December 31, 2012 (in thousands):

	East Company	West Company
Debt	P200,000	P300,000
Shareholders' equity	300,000	200,000
Total equity	P500,000	P500,000
Preference dividends	P1,000	P3,500
Ordinary shareholders' equity	P200,000	P150,000
Earnings before interest and tax	P10,000	P12,000
Interest expense	2,000	6,000
Income before income tax	P8,000	P6,000
Income tax (40%)	3,200	2,400
Income tax	P4,800	P3,600

Required - Calculate the following ratios for East Company and West Company for 2012:

1. Debt ratio.

2. Equity ratio.

3. Debt equity ratio.

4. Equity multiplier.

5. Times interest earned.

6. Financial leverage.

Reference no: EM133085573

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Calculate the debt ratio for east company

Reference no: EM133085573

Reference no: EM133085573

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