Ratio of liabilities to stockholders’ equityThe following data were taken from Alvarado Company’s balance sheet: Dec. 31, 20Y4 Dec. 31, 20Y3Total liabilities $4,465,000 $2,625,000Total stockholders’ equity 4,700,000 3,500,000a. Compute the ratio of liabilities to stockholders’ equity for each year. Round your answers to 2 decimal places.Dec. 31, 20Y4 Dec. 31, 20Y3 b. Has the creditor’s risk increased or decreased from December 31, 20Y3, to December 31, 20Y4I don't know how to find the A

The ratio of liabilities to stakeholder's equity can be calculated by dividing a company's…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Ratio of liabilities to stockholders’ equity

The following data were taken from Alvarado Company’s balance sheet:

	Dec. 31, 20Y4	Dec. 31, 20Y3
Total liabilities	$4,465,000	$2,625,000
Total stockholders’ equity	4,700,000	3,500,000

a. Compute the ratio of liabilities to stockholders’ equity for each year. Round your answers to 2 decimal places.

Dec. 31, 20Y4
Dec. 31, 20Y3

b. Has the creditor’s risk increased or decreased from December 31, 20Y3, to December 31, 20Y4

I don't know how to find the A

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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