Give me correct answer accounting....... Geisner Inc. has total assets of $1,000,000 and total liabilities of$600,000. The industry average debt-to-equity ratio is 1.20.Calculate Geisner's debt-to-equity ratio and indicate whetherthe company's default risk is higher or lower than the average ofother companies in the industry.

Step 1: Define Total DebtA company's total debt represents the amount it owes to the creditors,…

Answered: Geisner Inc. has total assets of…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter3: Analysis Of Financial Statements

Section: Chapter Questions

Problem 8P

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Geisner Inc. has total assets of $1,000,000 and total liabilities of $600,000. The industry average debt-to-equity ratio is 1.20. Calculate Geisner's debt-to-equity ratio and indicate whether the company's default risk is higher or lower than the average of other companies in the industry.