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)
- manufacturing cost.arrow_forwardA company acquired a trademark on January 1, 2015, for $5 million. The trademark will be used for 10 years, even though its legal life is 25 years. The company has made a commitment to sell the trademark to another firm for $300,000 at the end of 10 years. Compute the annual amortization expense for 2015, assuming the straight-line method is used. Helparrow_forwardSol This question answerarrow_forward
- choose best answerarrow_forward2 POINTarrow_forwardZeb Enterprises' corporate charter allows it to issue 3,000,000 shares of common stock. In its first year of business, Zeb sold 750,000 shares of common stock in March 2015. Zeb bought back 2,500 shares of its stock during November 2015. At December 31, 2015, how many shares of common stock are outstanding? Answerarrow_forward
- Zeb Enterprises' corporate charter allows it to issue 3,000,000 shares of common stock. In its first year of business, Zeb sold 750,000 shares of common stock in March 2015. Zeb bought back 2,500 shares of its stock during November 2015. At December 31, 2015, how many shares of common stock are outstanding?arrow_forwardWhat is the weighted average cost of capital on these financial accounting question?arrow_forwardThe Carter Corporation's next expected dividend, D1, is $2.75; its growth rate is 5.5 percent, and its stock currently sells for $40.50. New stock can be sold to net the firm $36.90 per share. a. What is Carter's percentage flotation cost? b. What is Carter's cost of new common stock?arrow_forward
- correct answer please help me general accountingarrow_forwardOn January 1, 2020, Franklin Ltd. acquired a delivery truck at a cost of $750,000. It is to be depreciated on the straight-line method over a 5-year period with no residual value. Due to a bookkeeping error, no depreciation was recognized in Franklin's 2020 financial statements. The oversight was discovered during the preparation of Franklin's 2021 financial statements. Depreciation expense on this truck for 2021 should be____.helparrow_forwardWhat is the amount of joint costs assigned?arrow_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




