Chapter 14, Problem 14.6BE

a)

To determine

Financial Ratios: Financial ratios are the metrics used to evaluate the liquidity, capabilities, profitability, and overall performance of a company.

Ratio of fixed assets to long-term liabilities: Ratio of fixed assets to long-term liabilities is determined by dividing fixed assets and long-term liabilities.

Formula:

$\text{Ratio of fixed assets to long-term liabilities}=\frac{\text{Fixed assets }}{\text{Long-term liabilities }}$

To compute: Ratio of fixed assets to long-term liabilities.

Given info: Fixed assets and long-term liabilities

b)

To determine

Financial Ratios: Financial ratios are the metrics used to evaluate the liquidity, capabilities, profitability, and overall performance of a company.

Ratio of liabilities to stockholders’ equity: Ratio of liabilities to stockholders’ equity is determined by dividing liabilities and stockholders’ equity.

Formula:

$\text{Ratio of liabilities to stockholders' equity}=\frac{\text{Total liabilities}}{\text{Stockholders' equity}}$

To compute: Ratio of liabilities to stockholders’ equity

Given info: Total liabilities and Stockholders’ equity