Concept Introduction
Assets = Liabilities + Shareholders' Equity
Net Income: Net income or net profit is the earing available for the owner of business after deducting all the expenses. It is the difference of the total revenue and total expenses. When total expenses are more than the total revenue, it is called net loss.
Debt Ratio: Debt ratio is a financial ratio that calculates the leverage of the company. It is the ratio of the total debt to the total assets and is represented in percentage terms. The debt ratio explains the amount of debt on the balance sheet as compared to assets on the balance sheet. The higher the ratio, the higher is the risk associated with the company.
1.
To Prepare: The Balance sheet for Nettle Distribution from the ledger balance given.
To Compute: The net income for 2017.
To Compute: The 2017 year-end debt ratio.
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Chapter 2 Solutions
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