Question
Dec. 31, Year 2 Dec. 31, Year 1 Total liabilities $900,000 $1,300,000 Total stockholders' equity 1,500,000 1,600,000 (a) Compute the ratio of liabilities to stockholders'
| Dec. 31, Year 2 | Dec. 31, Year 1 | |
| Total liabilities | $900,000 | $1,300,000 |
| Total stockholders' equity | 1,500,000 | 1,600,000 |
(a) Compute the ratio of liabilities to stockholders' equity for each year.
(b) Has the creditors risk increased or decreased from December 31, Year 1, to December 31, Year 2?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Finance For Non Financial Managers
Authors: Pierre G. Bergeron
5th Edition
0176104070, 9780176104078
