Question

The ratio of liabilities to stockholders’ equity for a company is as follows… ______________________2019______________2018______ Total liabilities...

The ratio of liabilities to stockholders’ equity for a company is as follows…

______________________2019______________2018______

Total liabilities $.  550,000 $400,000

Total Stockholders’ equity $ 900,000 $700,000

Ratio of liabilities to

stockholders’ equity .56 .57

In which year, was the company more solvent?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Solvency of Company is determined by Debit to Equity ratio, higher the ratio less solvent the company would be.

Debt Equity Ratio = Debt/Equity

Particulars 2019 2018
Liabilities          550,000          400,000
Equity          900,000          700,000
Debt to Equity                 0.61                 0.57

So according to above table, in year 2018 Debt equity ratio is less than debt equity ratio in year 2019,therefore year 2018 is more solvent.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Ratio of Liabilities to Stockholders' Equity and Ratio of Fixed Assets to Long-Term Liabilities Recent balance...
Ratio of Liabilities to Stockholders' Equity and Ratio of Fixed Assets to Long-Term Liabilities Recent balance sheet information for two companies in the food industry, Santa Fe Company and Madrid Company, is as follows (in thousands): Santa Fe Madrid Net property, plant, and equipment $299,760 $623,040 Current liabilities 258,839 786,135 Long-term debt 369,704 560,736 Other long-term liabilities 129,896 218,064 Stockholders' equity 161,370 306,850 a. Determine the ratio of liabilities to stockholders' equity for both companies. Round to one decimal place....
Ratio of Liabilities to Stockholders' Equity and Times Interest Earned The following data were taken from...
Ratio of Liabilities to Stockholders' Equity and Times Interest Earned The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years: Current Year Previous Year Accounts payable $626,000 $310,000 Current maturities of serial bonds payable 550,000 550,000 Serial bonds payable, 10% 2,520,000 3,070,000 Common stock, $1 par value 90,000 120,000 Paid-in capital in excess of par 1,020,000 1,020,000 Retained earnings 3,510,000 2,790,000 The income before income tax was $1,013,100 and $886,500 for...
A company has total stockholders' equity of $2,000,000 and total debt of $3,000,000. The equity ratio...
A company has total stockholders' equity of $2,000,000 and total debt of $3,000,000. The equity ratio is: 40%. Can someone explain how to arrive at the 40%?
The accounting equation for Oriole Company is as follows: Assets Liabilities Stockholders' Equity $119200 = $59600...
The accounting equation for Oriole Company is as follows: Assets Liabilities Stockholders' Equity $119200 = $59600 + $59600 If Oriole purchases office equipment on account for $25800, the accounting equation will change to Assets Liabilities Stockholders' Equity $145000 = $72500   + $72500 $145000 = $85400   + $59600 $119200 = $59600   + $59600 $145000 = $59600   + $85400
Current liabilities                            74,979 Stockholders' equity       &nb
Current liabilities                            74,979 Stockholders' equity                         249,222 Common stock                            50,000 Preferred stock (cumulative)                         374,000 Total liabilities                         174,979 Fixed assets                         350,000 Current assets                            50,000 Total assets                         424,201 Debt ratio = ______________ Debt to equity ratio = _________________ Construct a Vertical Common Size balance sheet
Selected current year company information follows: Net income $ 16,453 Net sales 717,855 Total liabilities, beginning-year...
Selected current year company information follows: Net income $ 16,453 Net sales 717,855 Total liabilities, beginning-year 88,932 Total liabilities, end-of-year 108,201 Total stockholders' equity, beginning-year 203,935 Total stockholders' equity, end-of-year 129,351 The return on total assets is (Do not round intermediate calculations.):  3.02%.  6.20%.  2.71%.  2.45%.  2.29%.
At the beginning of the year, Gal Company had liabilities of $50,000 and stockholders’ equity of...
At the beginning of the year, Gal Company had liabilities of $50,000 and stockholders’ equity of $96,000. If assets increased by $40,000 and liabilities decreased by $30,000, what was the stockholders’ equity at the end of the year? Select one: a. $146,000 b. $166,000 c. $186,000 d. $96,000 e. $36,000
Feiler Corporation has total current assets of $515,000, total current liabilities of $379,000, total stockholders' equity...
Feiler Corporation has total current assets of $515,000, total current liabilities of $379,000, total stockholders' equity of $1,089,000, total plant and equipment (net) of $1,063,000, total assets of $1,578,000, and total liabilities of $489,000. The company's current ratio is closest to: Multiple Choice a. 0.78 b. 1.05 c. 1.36 d. 2.17
Ratio of Liabilities to Stockholders' Equity and Times Interest Earned The following data were taken from...
Ratio of Liabilities to Stockholders' Equity and Times Interest Earned The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years: Current Year Previous Year Accounts payable $522,000 $140,000 Current maturities of serial bonds payable 320,000 320,000 Serial bonds payable, 10% 1,300,000 1,620,000 Common stock, $1 par value 60,000 70,000 Paid-in capital in excess of par 670,000 680,000 Retained earnings 2,330,000 1,850,000 The income before income tax was $469,800 and $411,100 for...
Company A has total assets of $130,000 and $ $30,000 in equity. Company B has a...
Company A has total assets of $130,000 and $ $30,000 in equity. Company B has a debt-to-equity ratio of 2.50. What can be said regarding these companies? (Check all that apply.) A. It is not possible to calculate the debt-to-equity ratio for Company A. B. Company A has $100,000 in liabilities.   C. Company A is more solvent than Company B. D. The debt-to-equity ratio of Company A is 76.9%.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT