Given the following information, what is the ratio of liabilities to stockholders’ equity? Fixed assets (net) at year-endAverage fixed assetsTotal assets$420,000470,000520,000Long-term liabilities310,000Total liabilities360,000Total stockholders' equity200,000Total liabilities and stockholders' equity 560,000Interest expense5,000Income before income tax230,000Net income180,000O a. 1.6O b. 2.6c. 2.4O d. 1.8

LIABILITIES TO STOCKHOLDER EQUITY RATIO Liabilities to Stockholder Equity Ratio is the ratio between…

Answered: Given the following information, what…

Business

Accounting

Given the following information, what is the ratio of liabilities to stockholders’ equity?

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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Question

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Given the following information, what is the ratio of liabilities to stockholders’ equity?

Fixed assets (net) at year-end
Average fixed assets
Total assets
$420,000
470,000
520,000
Long-term liabilities
310,000
Total liabilities
360,000
Total stockholders' equity
200,000
Total liabilities and stockholders' equity 560,000
Interest expense
5,000
Income before income tax
230,000
Net income
180,000
O a. 1.6
O b. 2.6
c. 2.4
O d. 1.8

Definition Definition Assets available to stockholders after a company's liabilities are paid off. Stockholders’ equity is also sometimes referred to as owner's equity. A stockholders’ equity or book value generally includes common stock, preferred stock, and retained earnings and is an indicator of a company's financial strength.

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