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 PJ and Company YB.
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 PJ and Company YB.
Solution Summary: The author explains the ratio of liabilities to stockholders' equity, which measures the claims of creditors over owners in financing the assets.
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 1.4ADM
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 PJ and Company YB.
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 PJ and Company YB.
c)
To determine
A more risky company among Company PJ and Company YB.
Baxter Sports Ltd. of Australia manufactures sporting equipment. One of the company's products, a rugby helmet for the European market, requires a special plastic. During the quarter ending September 30, the company manufactured 3,500 helmets, using 2,350 kilograms of plastic. The plastic cost the company $19,975. According to the standard cost card, each helmet should require 0.65 kilograms of plastic, at a cost of $8.25 per kilogram. According to the standards, what cost for plastic should have been incurred to make 3,500 helmets? How much greater or less is this than the cost that was incurred? Help
Your fim's DSO is
Chapter 1 Solutions
Working Papers for Warren/Reeve/Duchac's Corporate Financial Accounting, 14th