Ratio of liabilities to stockholders' equity : Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the owner's equity. This ratio measures the claims of creditors over the claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations. Ratio of liabilities to stockholders' equity } = Total Liabilities Total Owner's Equity To Compute: The ratio of liabilities to stockholders' equity of Company A and Company B.

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Answer 1

Question

Chapter 1, Problem 1.1ADM

a)

To determine

Ratio of liabilities to stockholders' equity: Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the owner's equity. This ratio measures the claims of creditors over the claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Ratio of liabilities tostockholders' equity}=Total LiabilitiesTotal Owner's Equity

To Compute: The ratio of liabilities to stockholders' equity of Company A and Company B.

b)

To determine

To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company A and Company B.

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Answer 2

Question

Chapter 1, Problem 1.1ADM

a)

To determine

Ratio of liabilities to stockholders' equity: Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the owner's equity. This ratio measures the claims of creditors over the claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Ratio of liabilities tostockholders' equity}=Total LiabilitiesTotal Owner's Equity

To Compute: The ratio of liabilities to stockholders' equity of Company A and Company B.

b)

To determine

To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company A and Company B.

Expert Solution & Answer

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Answer 3

Question

Chapter 1, Problem 1.1ADM

a)

To determine

Ratio of liabilities to stockholders' equity: Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the owner's equity. This ratio measures the claims of creditors over the claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Ratio of liabilities tostockholders' equity}=Total LiabilitiesTotal Owner's Equity

To Compute: The ratio of liabilities to stockholders' equity of Company A and Company B.

b)

To determine

To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company A and Company B.

Expert Solution & Answer

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Answer 4

Question

Chapter 1, Problem 1.1ADM

a)

To determine

Ratio of liabilities to stockholders' equity: Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the owner's equity. This ratio measures the claims of creditors over the claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Ratio of liabilities tostockholders' equity}=Total LiabilitiesTotal Owner's Equity

To Compute: The ratio of liabilities to stockholders' equity of Company A and Company B.

b)

To determine

To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company A and Company B.

Expert Solution & Answer

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Answer 5

Chapter 1, Problem 1.1ADM

a)

To determine

Ratio of liabilities to stockholders' equity: Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the owner's equity. This ratio measures the claims of creditors over the claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Ratio of liabilities tostockholders' equity}=Total LiabilitiesTotal Owner's Equity

To Compute: The ratio of liabilities to stockholders' equity of Company A and Company B.

b)

To determine

To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company A and Company B.

Answer 6

Chapter 1, Problem 1.1ADM

a)

To determine

Ratio of liabilities to stockholders' equity: Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the owner's equity. This ratio measures the claims of creditors over the claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Ratio of liabilities tostockholders' equity}=Total LiabilitiesTotal Owner's Equity

To Compute: The ratio of liabilities to stockholders' equity of Company A and Company B.

Answer 7

Chapter 1, Problem 1.1ADM

a)

To determine

Ratio of liabilities to stockholders' equity: Ratio of liabilities to stockholders' equity shows the relationship between the liabilities and the owner's equity. This ratio measures the claims of creditors over the claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Ratio of liabilities tostockholders' equity}=Total LiabilitiesTotal Owner's Equity

To Compute: The ratio of liabilities to stockholders' equity of Company A and Company B.

Answer 8

b)

To determine

To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company A and Company B.

Answer 9

b)

To determine

To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company A and Company B.

Answer 10

Expert Solution & Answer

Answer 11

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Answer 12

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Answer 13

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Solution Summary: The author analyzes the ratio of liabilities to stockholders' equity of Company A and Company B.

To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company A and Company B.

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