a.
Liabilities:
Liabilities are the obligations that an entity owes to outsiders. It can be both short-term as well as long-term. Short-term liabilities are the ones that need to be settled within a year or an operating cycle, whichever is shorter. Similarly, long-term liabilities are to be settled beyond one year or the operating cycle. Liabilities, both current and non-current, are shown on the face of the
Requirement 1
To report:
The total amount of liabilities for A for fiscal years ended September 28, 2019, and 2018.
b.
Assets:
Assets are the resources that an entity owns. It can be both short-term as well as long-term. Short-term assets are the ones that bring benefits to the business within a year or an operating cycle, whichever is shorter. Similarly, long-term assets are the ones from which the benefits are expected to flow into the business over several years. Assets, both current and non-current, are shown on the face of the balance sheet under the main heading Assets and are further divided into sub-headings of current and non-current assets.
Requirement 2
To report:
The total amount of assets of A for fiscal years ended September 28, 2019, and 2018.
c.
Debt ratio:
Debt ratios are expressed to determine the company’s ability to pay off its entire liabilities through the resources that it owns. It means that this ratio will determine the future solvency of the company.
Requirement 3
To compute:
The debt ratio of A for the fiscal years ended September 28, 2019, and September 29, 2018.
d.
Financial leverage:
Financial leverage refers to the company’s obligations on the company’s assets. The more the financial leverage of an entity, the greater will be the risk for the company for future sustainability. As more financial leverage attracts more fixed costs, it is always advisable for every company to check for its financial leverage to be under the controllable level.
Requirement 4
Which of the fiscal year, the company employed more financial leverage?
Want to see the full answer?
Check out a sample textbook solution
Chapter 2 Solutions
FINANCIAL & MANAG ACCT (CH. 1 - 24 LOOSE
- Please Solve this Questionarrow_forwardTechtronic Inc., a manufacturing company, has just completed an order that Micro Solutions placed for 150 gadgets. The direct material, purchased parts, and direct labor costs for the Micro order are as follows: • Cost of direct materials: $54,000 • Cost of purchased parts: $30,000 • Direct labor hours: 300 hours • • Average direct labor pay rate: $18 per hour Overhead costs were applied at a plant wide overhead rate of 250 percent of direct labor dollars. Compute the total cost of the Micro order.arrow_forwardHello tutor please given General accounting question answer do fast and properly explain all answerarrow_forward
- Given below are the account balances for Redstone Corp: . Gross sales: $150,000 • Sales returns and allowances: $6,000 • Selling expenses: $15,000 • Cost of goods sold: $65,000 • Interest expense: $4,000 How much is the gross profit margin?arrow_forwardTechtronic Inc., a manufacturing company, has just completed an order that Micro Solutions placed for 150 gadgets. The direct material, purchased parts, and direct labor costs for the Micro order are as follows: • Cost of direct materials: $54,000 • Cost of purchased parts: $30,000 • Direct labor hours: 300 hours • • Average direct labor pay rate: $18 per hour Overhead costs were applied at a plant wide overhead rate of 250 percent of direct labor dollars. Compute the total cost of the Micro order.arrow_forwardBlueSky Corp has total debt of $250 million and 40 million shares outstanding with a market price of $5.50 per share. Calculate BlueSky's market debt-equity ratio. A) 1.52 B) 0.88 C) 1.14 D) 2.15arrow_forward
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College