Recent balance sheet information for two companies in the food industry, Santa Fe Company and Madrid Company, is as follows (in thousands): Santa Fe Madrid Net property, plant, and equipment $564,720 $764,600 Current liabilities 160,538 500,650 Long-term debt 522,366 550,512 Other long-term liabilities 183,534 214,088 Stockholders' equity 228,010 301,250 a. Determine the ratio of liabilities to stockholders' equity for both companies. Round your answers to one decimal place. Santa Fe Madrid b. Determine the ratio of fixed assets to long-term liabilities for both companies. Round your answers to one decimal place. Santa Fe Madrid

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Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.