The Debt to Equity Ratio and Times-Interest-Earned Ratio for Conway

question 36

Multiple Choice

The debt to equity ratio and times-interest-earned ratio for Conway Corporation for the last two years are as follows: $$\begin{array} { l r r } & 2011 & 2010 \\\text { Debt to equity } & .34 & .35 \\\text { Times-interest-earned } & 4.2 \times & 5.5 \times \end{array}$$
Which of the following conclusions could be made about Conway Corporation?

• A)The company is less able to pay its interest costs in 2011.
• B)The company is better able to pay its interest costs in 2011.
• C)The company has more debt outstanding in 2011.
• D)The company is less risky in 2011.

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