Dalton Ltd. has total assets of $1,200,000 and total liabilities of $720,000. The industry average debt- to-equity ratio is 1.50. Calculate Dalton's debt-to-equity ratio and indicate whether the company's default risk is higher or lower than the industry average.
Dalton Ltd. has total assets of $1,200,000 and total liabilities of $720,000. The industry average debt- to-equity ratio is 1.50. Calculate Dalton's debt-to-equity ratio and indicate whether the company's default risk is higher or lower than the industry average.
Chapter3: Analysis Of Financial Statements
Section: Chapter Questions
Problem 8P
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Please provide the correct answer to this financial accounting problem using accurate calculations.
Transcribed Image Text:Dalton Ltd. has total assets of $1,200,000 and total
liabilities of $720,000. The industry average debt-
to-equity ratio is 1.50.
Calculate Dalton's debt-to-equity ratio and
indicate whether the company's default risk is
higher or lower than the industry average.
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