Recent balance sheet information for two companies in the food industry, Santa Fe Company and Madrid Company, is as follows (in thousands): Santa FeMadridNet property, plant, and equipment$428,320 $817,800 Current liabilities104,441 471,040 Long-term debt396,196 588,816 Other long-term liabilities139,204 228,984 Stockholders' equity172,930 322,210 a. Determine the ratio of liabilities to stockholders' equity for both companies. Round to one decimal place.Santa Fe Madrid b. Determine the ratio of fixed assets to long-term liabilities for both companies. Round to one decimal place.Santa Fe Madrid

Particulars Santa Fe Madrid Current liabilities $104,441 $471,040 Long-term debt 396,196 588,816 Other long-term liabilities 139,204 228,984 Total Liabilities $639,841 $1,288,840a. Particulars Santa Fe Madrid Total Liabilities (a) $639,841 $1,288,840 Stockholders' equity (b) 172,930 322,210 Ratio of liabilities to stockholders' equity (a / b) 3.7 4.0 b. Particulars Santa Fe Madrid Net property, plant, and equipment $428,320 $817,800 Long-term debt 396,196 588,816 Ratio of fixed assets to long-term liabilities 1.1 1.4

Answered: Recent balance sheet information for…

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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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	$428,320		$817,800
Current liabilities	104,441		471,040
Long-term debt	396,196		588,816
Other long-term liabilities	139,204		228,984
Stockholders' equity	172,930		322,210

a. Determine the ratio of liabilities to stockholders' equity for both companies. Round to one decimal place.

Santa Fe
Madrid

b. Determine the ratio of fixed assets to long-term liabilities for both companies. Round to one decimal place.

Santa Fe
Madrid

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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