Suppose that you are a stock analyst and you are evaluating a company that has a significant number of operating leases Required a Discuss the potential misstatement of the financial statements that may occur because of this treatment Specifically, address the impact of this type of accounting on t...

a The potential misstatement from treating leases as operating leases instead of finance leases rela ...

Suppose that you are a stock analyst and you are evaluating a company that has a significant

Question:

Suppose that you are a stock analyst and you are evaluating a company that has a significant number of operating leases.
Required:
a. Discuss the potential misstatement of the that may occur because of this treatment. Specifically, address the impact of this type of accounting on the debt to total assets ratio and return on total assets ratio.
b. Using disclosures provided in the notes to the explain how you could adjust the statements to address the issues discussed in part "a."
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...