An analyst makes the appropriate adjustments to th
An analyst makes the appropriate adjustments to the financial statements of retail companies that are lessees using a substantial number of operating leases.Compared to ratios computed from the unadjusted statements, the ones computed from the adjusted statements wouldmost likely be higher for:
A.the debt-equity ratio but not the interest coverage ratio.
B.the interest coverage ratio but not the debt-equity ratio.
C.both the debt-equity ratio and the interest coverage ratio.
参考解答
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2024-11-06 15:23:19
Ans:A.
The adjustments to convert operating leases into capital leases would increase the amount of total debt in the debt-equity ratio thus increasing the ratio; the portion of the lease payment estimated to be lease interest expense would lower the interest coverage ratio.
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