Take another look at Geomorph Trading?s balance sheet in quiz question 9, and consider the following additional

Question:

Take another look at Geomorph Trading?s balance sheet in quiz question 9, and consider the following additional information:

The ?R&R reserve? covers the future costs of removal of an oil pipeline and environmental restoration of the pipeline route. There are many ways to calculate a debt ratio for Geomorph. Suppose you are evaluating the safety of Geomorph?s debt and want a debt ratio for comparison with the ratios of other companies in the same industry. Would you calculate the ratio in terms of total liabilities or total capitalization? What would you include in debt?the bank loan, the deferred tax account, the R&R reserve, the unfunded pension liability? Explain the pros and cons of these choices.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...