Question

The following information has been condensed from the December 31 balance sheets of Angel Co.: Year...

The following information has been condensed from the December 31 balance sheets of Angel Co.:

Year 2

Year 1

Assets:

Current assets

$   725,500

$   674,300

Fixed assets (net)

  1,473,600

  1,275,300

Total assets

$2,199,100

$1,949,600

Liabilities:

Current liabilities

$   313,500

$   309,600

Long-term liabilities

     703,000

545,000

Total liabilities

$1,016,500

$ 854,600

Stockholders' equity

$1,182,600

$1,095,000

Total liabilities and

  stockholders' equity

$2,199,100

$1,949,600

(a)    Determine the ratio of fixed assets to long-term liabilities for each year.

(b)   Determine the ratio of liabilities to stockholders' equity for each year.

(c)    Comment on the year-to-year changes for both ratios. Round your answers to two decimal places.

Show work

Homework Answers

Answer #1
Particular year 2 year 1
A) fixed assets 1473600 1275300
B) long term liabilities 703000 545000
C) fixed assets to long term liabilities ratio(a/b) 2.10 2.34
D)Total liabilities 1016500 854600
E) shareholder equity 1182600 1095000
F) liability to shareholder equity(d/E) 0.86 0.78

Comment

A) The fixed asset to liability ratio higher is better. The ratio has fallen as compare to last year because of we have purchased the new fixed assets but at the same time we have acquired the loan also.

B) liabilty to equity ratio lower the better, because liabilites has to be paid compulsorly and higher the liability may create liquidity problem.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The comparative condensed balance sheets of Gurley Corporation are presented below. GURLEY CORPORATION Comparative Condensed Balance...
The comparative condensed balance sheets of Gurley Corporation are presented below. GURLEY CORPORATION Comparative Condensed Balance Sheets December 31 2017 2016 Assets     Current assets $ 74,500 $ 81,600     Property, plant, and equipment (net) 97,500 91,000     Intangibles 28,200 39,000       Total assets $200,200 $211,600 Liabilities and stockholders’ equity     Current liabilities $ 41,800 $ 47,400     Long-term liabilities 141,800 151,200     Stockholders’ equity 16,600 13,000       Total liabilities and stockholders’ equity $200,200 $211,600 (a) Prepare a horizontal analysis of the balance sheet data for Gurley Corporation...
Common-Sized Balance Sheets The following end-of-the-year balance sheets (in millions) were adapted from recent financial statements...
Common-Sized Balance Sheets The following end-of-the-year balance sheets (in millions) were adapted from recent financial statements of Apple (AAPL). Year 1 Year 2 Current assets: Cash $13,844 $21,120 Marketable securities 11,233 20,481 Accounts receivable 27,219 30,343 Inventory 2,111 2,349 Other 14,124 15,085 Total current assets $68,531 $89,378 Long-term assets: Long-term marketable securities $130,162 $164,065 Property, plant, and equipment 20,624 22,471 Other long-term assets 12,522 14,565 Total long-term assets $163,308 $201,101 Total assets $231,839 $290,479 Current liabilities: Accounts payable and similar...
Vertical Analysis of Balance Sheet Balance sheet data for Alvarez Company on December 31, the end...
Vertical Analysis of Balance Sheet Balance sheet data for Alvarez Company on December 31, the end of two recent fiscal years, follows: Current Year Previous Year Current assets $327,950 $203,870 Property, plant, and equipment 477,870 435,860 Intangible assets 131,180 63,270 Current liabilities 215,510 119,510 Long-term liabilities 365,430 281,200 Common stock 103,070 98,420 Retained earnings 252,990 203,870 Prepare a comparative balance sheet for both years, stating each asset as a percent of total assets and each liability and stockholders' equity item...
CCC - Balance sheets 31 December 2018, 2017 assets 2018 2017 Fixed assets, net 600,000 500,000...
CCC - Balance sheets 31 December 2018, 2017 assets 2018 2017 Fixed assets, net 600,000 500,000 Inventory 70,000 50,000 Accounts receivable, net 100,000 150,000 Cash 30,000 50,000 Total current assets € 200,000 € 250,000 Total assets € 800,000 € 750,000 Equity and liabilities 2018 2017 Share capital 300,000 200,000 Retained earnings 80,000 100,000 Total equity € 380,000 € 300,000 Payable bonds 200,000 250,000 Accounts payable 150,000 120,000 Income taxes payable 70,000 80,000 Total current liabilities € 220,000 € 200,000 Total...
The following information comes from the balance sheets and income statements of Crosby Co.: As of...
The following information comes from the balance sheets and income statements of Crosby Co.: As of or for the Year ended December 31 Current Year Prior Year Cash $ 14,000 $ 14,000 Accounts receivable 21,000 26,000 Inventory 36,000 35,000 Property and equipment 132,000 129,000 Current liabilities 32,000 38,000 Long-term liabilities 73,000 70,000 Stockholders’ equity 98,000 96,000 Net sales revenues 400,000 335,000 Cost of goods sold 250,000 250,000 Operating expenses 100,000 95,000 Interest expense 10,200 14,000 Income tax expense 11,000 12,000...
Consider the following financial statements for Industrial Supply Company. (Actual) December 31, Balance sheet Year 1...
Consider the following financial statements for Industrial Supply Company. (Actual) December 31, Balance sheet Year 1 Comments Assets Cash $     400,000 20% increase (assumption) Accounts receivable 2,000,000 20% increase (assumption) Inventories 4,400,000 20% increase (assumption)     Total current assets $  6,800,000 Fixed assets, net $  1,200,000 20% increase (assumption)     Total assets (A) $  8,000,000 Liabilities and Equity Accounts payable (CL) $  1,200,000 20% increase (assumption) Notes payable 1,500,000     Total current liabilities $  2,700,000 Long-term debt 500,000 No change (assumption) Stockholders’ equity 4,800,000     Total liabilities and equity $  8,000,000...
Assume that the following balance sheets are stated at book value. Meat Co.   Current assets $...
Assume that the following balance sheets are stated at book value. Meat Co.   Current assets $ 12,600   Current liabilities $ 5,600   Net fixed assets 36,900   Long-term debt 10,100   Equity 33,800      Total $ 49,500     Total $ 49,500 Loaf, Inc.   Current assets $ 3,700   Current liabilities $ 1,600   Net fixed assets 7,600   Long-term debt 2,200   Equity 7,500      Total $ 11,300     Total $ 11,300 Suppose the fair market value of Loaf’s fixed assets is $11,100 versus the $7,600 book value shown. Meat pays...
Assume that the following balance sheets are stated at book value. Meat Co.   Current assets $...
Assume that the following balance sheets are stated at book value. Meat Co.   Current assets $ 12,600   Current liabilities $ 5,600   Net fixed assets 36,900   Long-term debt 10,100   Equity 33,800      Total $ 49,500     Total $ 49,500 Loaf, Inc.   Current assets $ 3,700   Current liabilities $ 1,600   Net fixed assets 7,600   Long-term debt 2,200   Equity 7,500      Total $ 11,300     Total $ 11,300 Suppose the fair market value of Loaf’s fixed assets is $11,100 versus the $7,600 book value shown. Meat pays...
[The following information applies to the questions displayed below.] The balance sheets for Fantasy Football for...
[The following information applies to the questions displayed below.] The balance sheets for Fantasy Football for 2018 and 2017 are provided below. Required: 1. Prepare a vertical analysis of Fantasy Football's 2018 and 2017 balance sheets. Express each amount as a percentage of total assets for that year. (Amounts to be deducted should be indicated by a minus sign. Round your answers to 1 decimal place.) FANTASY FOOTBALL Balance Sheets December 31 2018 2017 Amount % Amount % Assets Current...
Exercise 9-5 Suppose the comparative balance sheets of Nike, Inc. are presented here. NIKE, INC. Condensed...
Exercise 9-5 Suppose the comparative balance sheets of Nike, Inc. are presented here. NIKE, INC. Condensed Balance Sheet May 31 ($ in millions) 2017 2016 Assets Current Assets $9,640 $8,720 Property, plant, and equipment (net) 2,010 1,840 Other assets 1,450 1,730 Total assets $13,100 $12,290 Liabilities and Stockholders' Equity Current Liabilities $3,250 $3,340 Long-term liabilities 1,290 1,340 Stockholders’ equity 8,560 7,610 Total liabilities and stockholders' equity $13,100 $12,290 Prepare a horizontal analysis of the balance sheet data for Nike, using...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT