Jalbert Products
Data Table:
Net operating revenues $ 30.7
Operating expenses 25.5
Operating income 5.2
Nonoperating items:
Interest expense (1.2)
Other (0.6)
Net income $ 3.4
Total assets $150.0
Total stockholders equity 51.0
1. Compute Jalbert leverage ratio, debt ratio and interest-earned ratio and write a section to explain what these ratios values mean. Would you be willing to lend Talbert 1 million? State your reason. (Enter all amounts inmillions round ratio answer to two decimal places.
2. This means that (a). For every dollar of interest Talbert earned $ 4.33 of expecting income. (b).Talbert has $ 4.33 million available to pay the principle long term debt. (c). For every dollar of operating income Talbert spent of $ 4.33 of interest expense.
3.Talbert debt ratio is (a). Above average (b).Extremely low. (c).Really high and the company (a).Can cover (b) Can't cover. Its
existing interest expense I (a).Would be willing to lend Talbert $ 1 million (b). Wouldnot be willing to lend Talbert $ 1 million.