Essay
Given the following data:
Dec. 31, Year 2 Dec. 31, Year 1
Total liabilities $128,250 $120,000
Total stockholders' equity 95,000 80,000
(a) Compute the ratio of liabilities to stockholders' equity for each year. Round your answer to two decimal places.
(b) Has the creditors' risk increased or decreased from December 31, Year 1, to December 31, Year 2?
Correct Answer:
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(a)
Dec. 31, Year 2 Dec. 31, Year 1
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Correct Answer:
Verified
Dec. 31, Year 2 Dec. 31, Year 1
Tota...
View Answer
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