Debt Ratio: Debt ratio is the relationship between the Total liabilities and Total Assets of a corporation. Debt ratio shows the part of assets financed by debts. It is calculated by dividing total liabilities by total assets. The formula of debt ratio is as follows: Debt Ratio = Total Liabilities Total Assets To Calculate: The Stockholder's Equity to total asset ratio using the Debt Ratios for year 1 and 2

Question

Want to see the full answer?

Answer 1

Question

Chapter 8, Problem 8.10.2MBA

To determine

Concept Introduction:

Debt Ratio:

Debt ratio is the relationship between the Total liabilities and Total Assets of a corporation. Debt ratio shows the part of assets financed by debts. It is calculated by dividing total liabilities by total assets. The formula of debt ratio is as follows:

Debt Ratio = Total LiabilitiesTotal Assets

To Calculate:

The Stockholder's Equity to total asset ratio using the Debt Ratios for year 1 and 2

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Consider this simplified balance sheet for Geomorph Trading: Current assets Long-term assets $ 245 Current liabilities Long-term debt 630 Other liabilities Equity $ 875 Required: a. What is the company's debt-equity ratio? (Hint: debt = Current liabilities, Long-term debt, and Other liabilities) Note: Round your answer to 2 decimal places. b. What is the ratio of total long-term debt to total long-term capital? Note: Round your answer to 2 decimal places. c. What is its net working capital? d. What is its current ratio? Note: Round your answer to 2 decimal places. $ 170 215 140 350 $ 875 a Debt-equity ratio b. Long-term debt-to-capital ratio c. Net working capital d. Current ratio

compute the following ratios using the Balance Sheet (Current Year) and Income Statement provided in the images below Current Ratio (in numeric format, 2 decimal places): Debt to Equity (in numeric format, 2 decimal places(): Return on Equity (stated as a percentage, 2 decimal places): Return on Assets (stated as a percentage, 2 decimal places):

Ratio of Liabilities to Stockholders’ Equity CompareAmazon.com to Best Buy Obj.6 Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. We will use Amazon as a continuing company exercise to reinforce the various tools and techniques for analyzing financial statements. We will begin with the ratio of liabilities to stockholders’ equity. Ratios can be used to compare companies in the same industry. For Amazon, there are a number of competitors that sell media, electronic, and other merchandise. Best Buy, Inc. (BBY) is one such company. The following total liabilities and stockholders’ equity information (in millions) is provided for Amazon and Best Buy for the end of a recent year:Amazon Best BuyTotal assets $64,747 $13,519Total liabilities 51,363 9,141Total stockholders' equity 13,384 4,378a. Compute the ratio of liabilities to stockholders' equity for each company. Round to two decimal places.b. What conclusions regarding the margin of protection to creditors…