a.
Concept Introduction:
Debt ratio: The debt ratio measures the percentage of shares financed by debt, the higher debt ratio is considered riskier for the business, because higher debt ratio indicates the larger portion of assets are funded by external debt, it is computed as total liabilities divided by the total of assets.
The Debt ratio for A in the current year and the prior year.
b.
Concept Introduction:
Debt ratio: Debt ratio measures the percentage of shares financed by debt, the higher debt ratio is considered riskier for the business, because a higher debt ratio indicates a larger portion of assets are funded by external debt, it is computed as total liabilities divided by the total of assets.
The company has a high degree of financial leverage.

Want to see the full answer?
Check out a sample textbook solution
Chapter 2 Solutions
FIN MANAG. ACCT. (LL) W/CONNECT (1TERM)
- Provide Answer in blankarrow_forwardAldrin Manufacturing uses a standard cost system with the following labor standards for one unit of product: ⚫ Standard hours per unit = 0.25 ⚫ Standard wage rate = $9.00 During March, Aldrin incurred 4,120 hours of direct labor and was paid $37,980 in wages for the production of 15,800 units. Calculate the direct labor rate variance and direct labor efficiency variance and indicate whether the variances are favorable or unfavorable.arrow_forwardKindly help me with accounting questionsarrow_forward
- XYZ is an all-equity firm that has 52,500 shares of stock outstanding at a market price of $18.45 per share. The firm is considering a capital structure with 40% debt at a rate of 5.5% and plans to use the proceeds to repurchase shares. Determine the number of shares outstanding once the debt is issued.arrow_forwardplease give me true answerarrow_forwardGeneral accounting questionarrow_forward
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
- Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage LearningCornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning




