The following selected ratios are available for Rainbow Corporation for the three most recent years: $\begin{array}{lccc}&2015&2014&2013\
\text { Debt to total assets } & \overline{48 \%} & \overline{52 \%} & \overline{60 \%} \
\text { Interest coverage } & 2.5 \text { times } & 2.6 \text { times } & 2.0 \text { times } \
\text { Free cash flow } & \$ 600,000 & \$ 590,000 & \$ 200,000
\end{array}$
Instructions
Using each of the three ratios above to support your answer, explain whether or not Rainbow's solvency has improved over the last three years.

Question

The following selected ratios are available for Rainbow Corporation for the three most recent years: $\begin{array}{lccc}&2015&2014&2013\
\text { Debt to total assets } & \overline{48 \%} & \overline{52 \%} & \overline{60 \%} \
\text { Interest coverage } & 2.5 \text { times } & 2.6 \text { times } & 2.0 \text { times } \
\text { Free cash flow } & \$ 600,000 & \$ 590,000 & \$ 200,000
\end{array}$
 Instructions
Using each of the three ratios above to support your answer, explain whether or not Rainbow's solvency has improved over the last three years.

Quizplus · Accepted Answer

The Answer of The following selected ratios are available for Rainbow Corporation for the three most recent years: $\begin{array}{lccc}&2015&2014&2013\
\text { Debt to total assets } & \overline{48 \%} & \overline{52 \%} & \overline{60 \%} \
\text { Interest coverage } & 2.5 \text { times } & 2.6 \text { times } & 2.0 \text { times } \
\text { Free cash flow } & \$ 600,000 & \$ 590,000 & \$ 200,000
\end{array}$
 Instructions
Using each of the three ratios above to support your answer, explain whether or not Rainbow's solvency has improved over the last three years.

The Following Selected Ratios Are Available for Rainbow Corporation for the Three