Ratio of Liabilities to Stockholders' Equity and Ratio of Fixed Assets to Long-Term Liabilities Recent balance sheet information for two companies in the food industry, Mondelez International, Inc., and The Hershey Company, is as follows (in thousands): Mondelez Hershey Net property, plant, and equipment $8,482,000 $2,130,294 Current liabilities 16,737,000 2,418,566 Long-term debt 12,532,000 3,254,280 Other long-term liabilities 7,747,000 622,908 Stockholders' equity 25,713,000 1,407,266 a. Determine the ratio of liabilities to stockholders' equity for both companies. Round your answers to one decimal place. Mondelez fill in the blank 1 Hershey fill in the blank 2 b. Determine the ratio of fixed assets to long-term liabilities for both companies. Round your answers to one decimal place. Mondelez fill in the blank 3 Hershey fill in the blank 4 c. Although Hershey uses more debt, it has slightly stronger creditor protection and borrowing capacity.
Ratio of Liabilities to
Recent
| Mondelez | Hershey | |||
| Net property, plant, and equipment | $8,482,000 | $2,130,294 | ||
| Current liabilities | 16,737,000 | 2,418,566 | ||
| Long-term debt | 12,532,000 | 3,254,280 | ||
| Other long-term liabilities | 7,747,000 | 622,908 | ||
| Stockholders' equity | 25,713,000 | 1,407,266 |
a. Determine the ratio of liabilities to stockholders' equity for both companies. Round your answers to one decimal place.
| Mondelez | fill in the blank 1 |
| Hershey | fill in the blank 2 |
b. Determine the ratio of fixed assets to long-term liabilities for both companies. Round your answers to one decimal place.
| Mondelez | fill in the blank 3 |
| Hershey | fill in the blank 4 |
c. Although Hershey uses more debt, it has slightly stronger creditor protection and borrowing capacity.
Ratios are a powerful accounting tool in assessing the health and efficiency of a company. Ratios utilize both the income statement and balance sheet in calculations.
Ratio of liabilities to stockholders' equity = Liabilities / Stockholder’s equity
ratio of fixed assets to long-term liabilities = Fixed assets / Long term liabilities
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