Rivera Corp. has total assets of $1,500,000 and total liabilities of $900,000. The industry average debt-to-equity ratio is 1.50. Calculate Rivera's debt-to-equity ratio and determine if the company has a higher or lower default risk compared to the industry average.
Rivera Corp. has total assets of $1,500,000 and total liabilities of $900,000. The industry average debt-to-equity ratio is 1.50. Calculate Rivera's debt-to-equity ratio and determine if the company has a higher or lower default risk compared to the industry average.
Chapter3: Analysis Of Financial Statements
Section: Chapter Questions
Problem 8P
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Financial accounting
Transcribed Image Text:Rivera Corp. has total assets of $1,500,000
and total liabilities of $900,000. The
industry average debt-to-equity ratio is 1.50.
Calculate Rivera's debt-to-equity ratio and
determine if the company has a higher or
lower default risk compared to the industry
average.
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