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 Total owner's equity at the end of the years 2 and 1 for Company LC.
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 Total owner's equity at the end of the years 2 and 1 for Company LC.
Solution Summary: The author explains the ratio of liabilities to stockholders' equity of Company LC.
Definition Definition Assets available to stockholders after a company's liabilities are paid off. Stockholders’ equity is also sometimes referred to as owner's equity. A stockholders’ equity or book value generally includes common stock, preferred stock, and retained earnings and is an indicator of a company's financial strength.
Chapter 1, Problem 1.27EX
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
Total owner's equity at the end of the years 2 and 1 for Company LC.
b)
To determine
The ratio of liabilities to stockholders' equity of Company LC.
c)
To determine
To derive: A conclusion regarding the margin of protection to the creditors from the ratio of liabilities to stockholders' equity of Company LC.
d)
To determine
To Compare: The ratio of liabilities to stockholders' equity of Company LC and Company THD.
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Summary:
You will investigate a case of asset theft involving several fraudsters for this assignment. The case offers a chance to assess an organization's corporate governance, fraud prevention, and risk factors.
Get ready:
Moha Computer Services Limited Links to an external website: Finish the media activity. The scenario you need to finish the assignment is provided by this media activity.
Directions:
Make a four to five-page paper that covers the following topics. Management must be questioned by an auditor regarding the efficacy of internal controls and the potential for fraud. A number of warning signs point to the potential for fraud in this instance. List at least three red flags (risk factors for fraud) that apply to the Moha case. Sort them into three groups: opportunities, pressures/incentives, and (ethical) attitudes/justifications.
Determine which people and organizations were impacted by Moha Computer Services Limited's enormous scam. Describe the fraud's financial and…
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Chapter 1 Solutions
Bundle: Accounting, 27th + Working Papers, Chapters 1-17