Answer:
The times interest earned ratio will reduce
Explanation:
The times interest earned ratio is a ratio that looks at how many times a companies earnings from operations can cover the loan interest it has to pay in a year.
It is calculated by the formula Earnings Before Interest and Tax divided by the interest expense.
Therefore looking at the scenario, if HCA increases its debt level by issuing a $1.53 billion bond, this will increase its interest expense significantly and the number of times its earnings will cover its interest expense will be remarkably lower.
Therefore the times interest earned ratio will reduce
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Answer:
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Answer:
0.97
Explanation:
The computation of the acid-test ratio is given below:
= Quick assets ÷ current liabilities
= (cash + short term investment + account receivable + supplies) ÷ (accounts payable + wages payable)
= ($58,110 + $14,000 + $58,000 + $5,600) ÷ ($108,000 + $31,900)
= $135,710 ÷ $139,900
= 0.97
