Debt Management Ratios}

Selected data from the financial statements of Lopez Company follow.

\section*{Required:}
Determine whether the debt-to-equity ratio is increasing or decreasing and whether Lopez should be concerned.
\section*{Cornerstone Exercise

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2018 2017 Total liabilities $1,205,000 $952,000 Common shares 250,000 225,000 Contributed surplus common shares 150,000 135,000 Retained earnings 155,000 145,000