Solution-What conclusion concerning each company long-run

What conclusion concerning each company long-run solvency

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Reference no: EM132803888

Question - The following information is available from the 2020 financial statements of Alpha Inc. and Omega Ltd.:

	(in millions)
	Alpha Inc.	Omega Ltd.
Income tax expense	$361	$766
Interest expense	480	1,423
Profit	654	948
Total assets	24,750	37,525
Total current liabilities	5,970	14,109
Total liabilities	16,485	31,816

Instructions -

(a) Based on the information given, calculate the following ratios for each company:

1. Debt to total assets

2. Interest coverage

(b) What conclusion concerning each company's long-run solvency can be determined from these ratios?

Reference no: EM132803888

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What conclusion concerning each company long-run solvency

Reference no: EM132803888

Reference no: EM132803888

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