Ratio of liabilities to stockholders’ equity Obj. 6 The following data were taken from Mesa Company’s balance sheet:

Dec. 31, 20Y6 Dec. 31, 20Y5 Total liabilities $547,800 $518,000 Total stockholders’ equity 415,000 370,000

a. Compute the ratio of liabilities to stockholders’ equity.

b. Has the creditor’s risk increased or decreased from December 31, 20Y5, to December 31, 20Y6?

AppendixLO1