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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
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 $728,000 $836,800 Current liabilities 471,471 877,640 Long-term debt 673,400 602,496 Other long-term liabilities 236,600 234,304 Stockholders' equity 293,930 329,700 a. Determine the ratio of liabilities to stockholders' equity for both companies. Round your answers to one decimal place. Santa Fe Madrid b. Determine the ratio of fixed assets to long-term liabilities for both companies. Round your answers to one decimal place. Santa Fe Madrid c. Although Madrid uses more debt, it has slightly stronger creditor protection and borrowing capacity.
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