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Given the following data: Total liabilities Total owner's equity Dec. 31, Year 2 Dec. 31, Year 1 $128,250 95,000 $120,000 80,000 a. Compute the ratio of liabilities to owner's equity for each year. Round your answers to two decimal places. Liabilities to Owner's Equity Ratio Dec. 31, Year 2 Dec. 31, Year 1 b. Has the creditors' risk increased or decreased from December 31, Year 1, to December 31, Year 2?

Given the following data: Total liabilities Total owner's equity Dec. 31, Year 2 Dec. 31, Year 1 $128,250 95,000 $120,000 80,000 a. Compute the ratio of liabilities to owner's equity for each year. Round your answers to two decimal places. Liabilities to Owner's Equity Ratio Dec. 31, Year 2 Dec. 31, Year 1 b. Has the creditors' risk increased or decreased from December 31, Year 1, to December 31, Year 2?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Given the following data: Total liabilities Total owner's equity Dec. 31, Year 2 Dec. 31, Year 1 $128,250 95,000 $120,000 80,000 a. Compute the ratio of liabilities to owner's equity for each year. Round your answers to two decimal places. Liabilities to Owner's Equity Ratio Dec. 31, Year 2 Dec. 31, Year 1 b. Has the creditors' risk increased or decreased from December 31, Year 1, to December 31, Year 2?
Transcribed Image Text:Given the following data: Total liabilities Total owner's equity Dec. 31, Year 2 Dec. 31, Year 1 $128,250 95,000 $120,000 80,000 a. Compute the ratio of liabilities to owner's equity for each year. Round your answers to two decimal places. Liabilities to Owner's Equity Ratio Dec. 31, Year 2 Dec. 31, Year 1 b. Has the creditors' risk increased or decreased from December 31, Year 1, to December 31, Year 2?
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