Question
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,
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 $510,600 $693,040 Current liabilities 385,915 772,036 Long-term debt 629,740 623,736 Other long-term liabilities 221,260 242,564 Stockholders' equity 274,870 341,320 a. Determine the ratio of liabilities to stockholders' equity for both companies. Round your answers to one decimal place. Santa Fe fill in the blank 1 Madrid fill in the blank 2 b. Determine the ratio of fixed assets to long-term liabilities for both companies. Round your answers to one decimal place. Santa Fe fill in the blank 3 Madrid fill in the blank 4 c. Although Madrid uses more debt, it has slightly stronger creditor protection and borrowing capacity.
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