Ratio of liabilities to owners’ equity : This ratio measures the claims of creditors over claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations. Formula of ratio of liabilities to owners’ equity: Ratio of liabilities to owners’ equity = Total liabilities Total owners’ equity To determine : Ratio of liabilities to owners’ equity of Company A

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Answer 1

Question

Chapter 1, Problem 1.8BPE

(a)

To determine

Ratio of liabilities to owners’ equity:

This ratio measures the claims of creditors over claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Formula of ratio of liabilities to owners’ equity:

$Ratio of liabilities to owners’ equity = Total liabilitiesTotal owners’ equity$

To determine: Ratio of liabilities to owners’ equity of Company A

(b)

To determine

Whether the creditor’s risk of Company A has increased or decreased from December 31, 2015 to December 31, 2016.

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Answer 2

Question

Chapter 1, Problem 1.8BPE

(a)

To determine

Ratio of liabilities to owners’ equity:

This ratio measures the claims of creditors over claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Formula of ratio of liabilities to owners’ equity:

$Ratio of liabilities to owners’ equity = Total liabilitiesTotal owners’ equity$

To determine: Ratio of liabilities to owners’ equity of Company A

(b)

To determine

Whether the creditor’s risk of Company A has increased or decreased from December 31, 2015 to December 31, 2016.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 1, Problem 1.8BPE

(a)

To determine

Ratio of liabilities to owners’ equity:

This ratio measures the claims of creditors over claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Formula of ratio of liabilities to owners’ equity:

$Ratio of liabilities to owners’ equity = Total liabilitiesTotal owners’ equity$

To determine: Ratio of liabilities to owners’ equity of Company A

(b)

To determine

Whether the creditor’s risk of Company A has increased or decreased from December 31, 2015 to December 31, 2016.

Expert Solution & Answer

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Answer 4

Question

Chapter 1, Problem 1.8BPE

(a)

To determine

Ratio of liabilities to owners’ equity:

This ratio measures the claims of creditors over claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Formula of ratio of liabilities to owners’ equity:

$Ratio of liabilities to owners’ equity = Total liabilitiesTotal owners’ equity$

To determine: Ratio of liabilities to owners’ equity of Company A

(b)

To determine

Whether the creditor’s risk of Company A has increased or decreased from December 31, 2015 to December 31, 2016.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 5

Chapter 1, Problem 1.8BPE

(a)

To determine

Ratio of liabilities to owners’ equity:

This ratio measures the claims of creditors over claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Formula of ratio of liabilities to owners’ equity:

$Ratio of liabilities to owners’ equity = Total liabilitiesTotal owners’ equity$

To determine: Ratio of liabilities to owners’ equity of Company A

(b)

To determine

Whether the creditor’s risk of Company A has increased or decreased from December 31, 2015 to December 31, 2016.

Answer 6

Chapter 1, Problem 1.8BPE

(a)

To determine

Ratio of liabilities to owners’ equity:

This ratio measures the claims of creditors over claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Formula of ratio of liabilities to owners’ equity:

$Ratio of liabilities to owners’ equity = Total liabilitiesTotal owners’ equity$

To determine: Ratio of liabilities to owners’ equity of Company A

Answer 7

Chapter 1, Problem 1.8BPE

(a)

To determine

Ratio of liabilities to owners’ equity:

This ratio measures the claims of creditors over claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.

Formula of ratio of liabilities to owners’ equity:

$Ratio of liabilities to owners’ equity = Total liabilitiesTotal owners’ equity$

To determine: Ratio of liabilities to owners’ equity of Company A

Answer 8

(b)

To determine

Whether the creditor’s risk of Company A has increased or decreased from December 31, 2015 to December 31, 2016.

Answer 9

(b)

To determine

Whether the creditor’s risk of Company A has increased or decreased from December 31, 2015 to December 31, 2016.

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 explains the ratio of liabilities to owners' equity of Company A, which measures the claims of creditors over owners’ claims in financing the assets.

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Whether the creditor’s risk of Company A has increased or decreased from December 31, 2015 to December 31, 2016.

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