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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Twenty metrics of liquidity, solvency, and profitability

The comparative financial statements of Automotive Solutions Inc. are as follows. The market price of Automotive Solutions Inc. common stock was $119.70 on December 31, 20Y8


Instructions

Ratio of liabilities to stockholder.' equity

To determine

Concept Introduction:

Financial Statement analysis is done using the components of a financial statement. These components are Balance sheet, Income statement, Statement of Cash flows etc. Annual report of a company contains financial statement of that year and previous year for comparison. If the company has subsidiaries or segments, the financial statement shall be consolidated for the entire business of the company.

To Calculate:

The Ratio of Liabilities to stockholder's equity.

Explanation

The Ratio of Liabilities to stockholder's equity is calculated as follows:

    20Y8 20Y7
    Total Liabilities (A) $ 2,600,000

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