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| | + Mezto. mheducation.com / hm.tpx?-=0.56856238882 72506-1460388196080-Homework 8 Reader SmartBook Chapter 9 Health and Disability Permanent insurance can be lim Top Sites Homework 8 Selected financial data for Bahama Bay and Caribbean Key are as follows (S in millions) Bahama Bay Caribbean Key 2018 2017 2018 2017 Total assets Total liabilities Total stockholders' equity $ 9,823 $ 9,742 $ 9,023 $ 9,062 7,583 7,573 1,440 1,489 8,142 7,606 1,681 2,136 Sales revenue Interest expense Tax expense Net income $ 12,939 175 356 374 $ 5,967 228 82 341 Required 1-a. Calculate the debt to equity ratio for Bahama Bay and Caribbean Key for the most recent year. (Do not round intermediate calculations. Round ratios answers to 1 decimal place Enter dollar answer in millions. (i.e., $5,500,000 should be entered as 5.5).) Debt to Equity Ratio Bahama Bay Caribbean KeyExplanation / Answer
1. calculation of debt equity ratio= total debt/equity
bahama bay = 8142/1681=4.843
caribbean key = 7583/1440=5.266
2.a calculation of return on assets = net income / total assets
bahama bay = 341/9823=3.47%
caribbean key = 374/9023=4.145%
2b. caribbean kay is more profitable based on return on assets
3a times interest earned ratio = EBIT/Interest expenses
bahama kay= 341+82+228/228=2.855
caribbean bay =374+356+175/175=5.171
3c based on interest earned ratio carribean bay is profitable
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