Solvency AnalysisThe following information was taken from Tyson Company's balance sheet:Fixed assets (net)$774,000Long-term liabilities430,000Total liabilities1,218,000Total stockholders' equity580,000Determine the company's (a) ratio of fixed assets to long-term liabilities and (b) ratio of liabilitiesto stockholders' equity. If required, round your answers to one decimal place.a. Ratio of fixed assets to long-term liabilitiesb. Ratio of liabilities to stockholders' equity

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Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 6BE

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Solvency Analysis
The following information was taken from Tyson Company's balance sheet:
Fixed assets (net)
$774,000
Long-term liabilities
430,000
Total liabilities
1,218,000
Total stockholders' equity
580,000
Determine the company's (a) ratio of fixed assets to long-term liabilities and (b) ratio of liabilities
to stockholders' equity. If required, round your answers to one decimal place.
a. Ratio of fixed assets to long-term liabilities
b. Ratio of liabilities to stockholders' equity

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Ratio analysis is a method of measuring the financial position of the organization with different kinds of ratios such as liquidity ratio, profitability ratio, solvency ratio. These ratios help to compare two or more financial statements.

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