Ratio of Liabilities to Stockholders' Equity and Ratio of Fixed Assets to Long-Term Liabilities

Recent balance sheet information for two companies in the food industry, Santa Fe Company and Madrid Company, is as follows (in thousands):

	Santa Fe		Madrid
Net property, plant, and equipment	$665,120		$687,200
Current liabilities	430,738		693,676
Long-term debt	615,236		494,784
Other long-term liabilities	216,164		192,416
Stockholders' equity	268,540		270,760

a. Determine the ratio of liabilities to stockholders' equity for both companies. Round to one decimal place.

Santa Fe
Madrid

b. Determine the ratio of fixed assets to long-term liabilities for both companies. Round to one decimal place.

Santa Fe
Madrid

c. Although Madrid uses more debt, it has slightly stronger creditor protection and borrowing capacity.