Bullseye is a large retailer. Its debt-to-equity ratio last year was 0.82 and its interest-coverage ratio was 20.5. The industry averages for these two ratios are 0.68 and 24.59, respectively. Based on that information, which of the following statements is true?
A) Bullseye can pay its interest expense more easily than the average in the industry.
B) Bullseye is less risky than average for the industry.
C) Bullseye has more debt in its capital structure than the average for the industry.
D) Bullseye has less debt in its capital structure than the average for the industry.

Question

Quizplus · Accepted Answer

Bullseye's debt-to-equity ratio of 0.82 is higher than the industry average of 0.68, indicating that Bullseye has more debt in its capital structure compared to the industry average.

Bullseye Is a Large Retailer