based on the information in Exhibit 2, Grupa Zywiec SA's credit risk is most likely: ExHibiT 2 European Food, beverage, and Tobacco industry and Grupa Zywiec SA Selected Financial Ratios for 2010
$\begin{array} { l c c c c c }
& \begin{array} { c }
\text { Total } \
\text { debt/Total } \
\text { capital } \
( \% )
\end{array} & \begin{array} { c }
\text { FFO/Total } \
\text { debt } \
( \% )
\end{array} & \begin{array} { c }
\text { Return on } \
\text { capital } \
( \% )
\end{array} & \begin{array} { c }
\text { Total debt/ } \
\text { EBITDA } \
( \mathrm { x } )
\end{array} & \begin{array} { c }
\text { EBITDA } \
\text { interest } \
\text { coverage } \
( \mathrm { x } )
\end{array} \
\hline \text { Grupa Zywiec SA } & 47.1 & 77.5 & 19.6 & 1.2 & 17.7 \
\text { Industry Median } & \mathbf { 4 2 . 4 } & \mathbf { 2 3 . 6 } & \mathbf { 6 . 5 5 } & \mathbf { 2 . 8 5 } & \mathbf { 6 . 4 5 } \
\hline
\end{array}$
A) lower than the industry.
B) higher than the industry.
C) the same as the industry.

Question

based on the information in Exhibit 2, Grupa Zywiec SA's credit risk is most likely: ExHibiT 2 European Food, beverage, and Tobacco industry and Grupa Zywiec SA Selected Financial Ratios for 2010
$\begin{array} { l c c c c c } 
& \begin{array} { c } 
\text { Total } \
\text { debt/Total } \
\text { capital } \
( \% )
\end{array} & \begin{array} { c } 
\text { FFO/Total } \
\text { debt } \
( \% )
\end{array} & \begin{array} { c } 
\text { Return on } \
\text { capital } \
( \% )
\end{array} & \begin{array} { c } 
\text { Total debt/ } \
\text { EBITDA } \
( \mathrm { x } )
\end{array} & \begin{array} { c } 
\text { EBITDA } \
\text { interest } \
\text { coverage } \
( \mathrm { x } )
\end{array} \
\hline \text { Grupa Zywiec SA } & 47.1 & 77.5 & 19.6 & 1.2 & 17.7 \
\text { Industry Median } & \mathbf { 4 2 . 4 } & \mathbf { 2 3 . 6 } & \mathbf { 6 . 5 5 } & \mathbf { 2 . 8 5 } & \mathbf { 6 . 4 5 } \
\hline
\end{array}$
A) lower than the industry.
B) higher than the industry.
C) the same as the industry.

Quizplus · Accepted Answer

Grupa Zywiec SA has a lower credit risk compared to the industry median, as indicated by its higher FFO/Total debt ratio (77.5% vs. 23.6%), higher Return on Capital (19.6% vs. 6.55%), lower Total debt/EBITDA (1.2x vs. 2.85x), and higher EBITDA interest coverage (17.7x vs. 6.45x). These ratios suggest Grupa Zywiec SA is in a stronger financial position to meet its debt obligations than the industry average.

Based on the Information in Exhibit 2, Grupa Zywiec SA's