Debt management ratios

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Debt Management Ratios

You are considering a stock investment in one of two firms (LotsofDebt, Inc. and LotsofEquity, Inc.), both of which operate in the same industry. LotsofDebt, Inc. finances its $34.00 million in assets with $31.00 million in debt and $3.00 million in equity. LotsofEquity, Inc. finances its $34.00 million in assets with $3.00 million in debt and $31.00 million in equity.

Calculate the debt ratio. (Round your answers to 2 decimal places.)

Debt ratio  Lots of Debt %   Lots of Equity % 

Calculate the equity multiplier. (Round your answers to 2 decimal places.)

Equity multiplier  Lots of Debt times   Lots of Equity times 

Calculate the debt-to-equity. (Round your answers to 2 decimal places.)

Debt-to-equity  Lots of Debt times   Lots of Equity times

Reference no: EM131890590

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