Running head: DEBT UTILIZATION RATIOSDebt Utilization RatiosNameInstitutionInstructorCourseDate12DEBT UTILIZATION RATIOSExecutive SummaryWal-Mart is an American Multinational Retail Corporation that operates a chain ofhypermarkets, groceries, discount department stores, and online shops. The company wasincorporated in 1969, and it is headquartered in Bentonville-Arkansas. Wal-Marts debt ratioscan be used to evaluate the companys ability to pay the principal and interest on all debtsoutstanding in keeping the company in operation. Debt ratios reflect how Wal-Mart finances itscritical assets to resist all economic ripples caused by factors such as competition (Monea, 2009).The ratios also indicate whether Wal-Mart is responsible for using debt to grow and expand, or itis desperately relying on debt to finance daily operations. The latter basically shows that WalMart may experience difficulties when trying to thrive in the market in the future. There are threereliable benchmarks to evaluate debt ratio; debt to Equity Ratio, Interest Coverage Ratio (TIE)and Equity Ratio.Debt Ratios as at Jan.20182020DEBTTotal123,700RATIOliabilitiesTotal assets 204,522EQUITYRATIOTotal80,822equityTotal assets 204,522TIMESEBITINTEREST InterestEARNEDexpense21,2032,178201920200.60 139,661 0.64154,943219,295236,4950.40 79,634219,2959.74 23,1572,1290.3681,552IndustryAverages0.66 0.710.34 1.01236,49510.88 21,4682,410 ...
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