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The debt to equity ratio for the current year is a.an indicator that the company's reliance on stockholders for funding increased from the prior year
The debt to equity ratio for the current year is a.an indicator that the company's reliance on stockholders for funding increased from the prior year to the current year. b.increasing slightly from the prior year to the current year. c.an indicator that the company's ability to meet current interest payments to creditors is increasing. d.an indicator that for every $1 of capital that has been provided by stockholders, creditors provided $0.83.
1. Information from the financial statements of Rio Imports is provided below: Current Year Prior Year Current Liabilities $460,000 $320,000 Long-Term Liabilities 240,000 640,000 Stockholders' Equity 840,000 1,080,000 Net Cash Flows from Operating Activities 160,000 102,000 Interest and Principal Payments 24,000 16,000 Net Sales 950,000 900,000 Net Income 180,000 144,000 Interest Expense 17,000 23,000 Income Taxes 32,000 29,000 Net Sales 950,000 900,000 Net Income 180,000 144,000 Interest Expense 17,000 23,000 Income Taxes 32,000 29,000 I Dividends Paid to Common Stockholders 30,000 60,000 2. The debt to equity ratio for the current year is a.an indicator that the company's reliance on stockholders for funding increased from the prior year to the current year. b.increasing slightly from the prior year to the current year. c. an indicator that the company's ability to meet current interest payments to creditors is increasing. d. an indicator that for every $1 of capital that has been provided by stockholders, creditors provided $0.83Step by Step Solution
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