Question

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

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Homework Answers

Answer #1

Answer to Part 1:
Debt Ratio = Total Debt / Total Assets
Debt Ratio = $174,979 / $424,201
Debt Ratio = 0.41

Answer to Part 2:
Debt to Equity Ratio = Total Debt / Total Equity
Debt to Equity Ratio = $174,979 / $249,222
Debt to Equity Ratio = 0.70

Answer to Part 3:
Part 3. can't be done as total of current assets and Fixed Assets are not matching with Total Assets.

In a same way, total of Common Stock and Preferred Stock is not matching with Stockholders' Equity.

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