Ratio of liabilities to owner's equity The following data were taken from Mesa Company's balance sheet: Dec. 31,2019 Dec. 31,2018 Total liabilities $547,000 $518,000 Total owner's equity 415,000 370,000 a. Compute the ratio of liabilities to owner's equity.b. Has the creditor's risk increased or decreased from December 31,2018, to December 31, 2019?
Ratio of liabilities to owner's equity The following data were taken from Mesa Company's balance sheet: Dec. 31,2019 Dec. 31,2018 Total liabilities $547,000 $518,000 Total owner's equity 415,000 370,000 a. Compute the ratio of liabilities to owner's equity.b. Has the creditor's risk increased or decreased from December 31,2018, to December 31, 2019?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
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Problem 51CE: Debt Management and Short-Term Liquidity Ratios The following items appear on the balance sheet of...
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Ratio of liabilities to owner's equity
The following data were taken from Mesa Company's balance sheet:
Dec. 31,2019 | Dec. 31,2018 |
Total liabilities | $547,000 | $518,000 |
Total owner's equity | 415,000 | 370,000 |
a. Compute the ratio of liabilities to owner's equity.
b. Has the creditor's risk increased or decreased from December 31,
2018, to December 31, 2019?
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