Thursday, February 28, 2019

PE 1-8B Ratio of liabilities to stockholders’ equity

The following data were taken from Alvarado Company’s balance sheet:
                                         dec. 31, 2016 | dec. 31, 2015
Total liabilities                       $4,085,000 | $2,880,000
Total stockholders’ equity.      4,300,000 | 3,600,000

a. Compute the ratio of liabilities to stockholders’ equity.

b. Has the creditor’s risk increased or decreased from December 31, 2015, to December 31, 2016?


Answer:
a. Dec. 31, Dec. 31, 
2016 2015 
  
Total    liabilities……………………………………………… $4,085,000 $2,880,000 
Total stockholders’ equity………………………………… $4,300,000 $3,600,000 
Ratio of liabilities to stockholders’ equity…………… 0.95* 
* $4,085,000 ÷ $4,300,000 
** $2,880,000 ÷ $3,600,000 

b. Increased 

1 comment:

  1. I want to share a testimony of how Mr. Pedro helped me with a $ 2,000,000.00 loan to fund my marijuana cultivation project, I am very grateful and promised to share this legitimate funding company with anyone looking for a way to expand their business project. . financing company. Anyone seeking financial support should contact them at pedroloanss@gmail.com / Whatsapp +18632310632

    ReplyDelete