TJMaxx has the total assets of $14,326 million, total liabilities of $9,277 million, the earnings before...

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TJMaxx has the total assets of $14,326 million, total liabilities of $9,277 million, the earnings before...

TJMaxx has the total assets of $14,326 million, total liabilities of $9,277 million, the earnings before interests and taxes of $4,218 million, interest expenses of $64 million, and depreciation of $817 million on its latest financial statements. Compute its equity multiplier.

A.1.84

B.1.12

C.0.84

D.2.84

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Answer 1

Answer #1

The equity multiplier is computed as shown below:

= Total Assets / Equity

Equity is computed as follows:

= Total Assets - Total Liabilities

= $ 14,326 million - $ 9,277 million

= $ 5,049 million

So, the equity multiplier will be:

= $ 14,326 million / $ 5,049 million

= 2.84 Approximately

So, the correct answer is option D i.e. 2.84.

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Answer 2

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TJMaxx has the total assets of $14,326 million, total liabilities of $9,277 million, the earnings before...