Bundle: Accounting, Loose-Leaf Version, 26th + CengageNOWv2, 2 term Printed Access Card
26th Edition
ISBN: 9781305617063
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 1, Problem 1.8BPE
(a)
To determine
Ratio of liabilities to owners’ equity:
This ratio measures the claims of creditors over claims of owners in financing the assets. A lower ratio indicates that the company has good ability to pay off the creditors’ obligations.
Formula of ratio of liabilities to owners’ equity:
Ratio of liabilities to owners’ equity of Company A
(b)
To determine
Whether the creditor’s risk of Company A has increased or decreased from December 31, 2015 to December 31, 2016.
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Chapter 1 Solutions
Bundle: Accounting, Loose-Leaf Version, 26th + CengageNOWv2, 2 term Printed Access Card
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