DEBT TO EQUITY RATIO IN THIS CASE ?

PLEASE EXPLAIN THE EQUATION USED IN THIS CASE

Exercise 5: Stone Cold Incorporated (15 points) 3) Refer to Stone Cold. For 2012, what was the debt-to-equity ratio? a. 0.81 b. 0.84 c. 0.98 d. 1.19 2012 10 Balance Sheet: 12/31/12 Assets Cash and Marketable Securities Accounts Receivable Inventories Total Current Assets Net plant and equipment TOTAL ASSETS 375 615 1,000 1,000 2.000 2011 80 315 415 810 870 1,680 2011 PLEASE ALSO EXPLAIN THE EQUATIONS USED TO CALCULATE DEBT TO EQUITY RATIO IN THIS CASE ???? Liabilities and Equity Accounts Payable Notes Payable Accruals Total Current Liabilities Long Term Bonds TOTAL DEBT Preferred Stock Common Stock 2012 60 140 110 310 754 1.064 130 230 580 810 40 130 130 Retained earnings TOTAL COMMON EQUITY TOTAL LIABILITIES AND EQUITY Income Statement: 12/31/12 Net Sales Operating Costs (excludes Dep Amortization) EBITDA Depreciation Amortization Depreciation and Amortization Less Interest EBT Taxes (40%) NET INCOME (before Preferred Dividends) Preferred Dividends NET INCOME Common Dividends Addition to Retained Earnings 766 896 2,000 2012 3,200 2.700 500 100 0 100 400 88 700 830 1.680 2011 2,850 2.497 353 90 312 124.8 117.8 66.2 64.8