The following data were taken from Alvarado Company's balance sheet: Dec. 31, 2016..............Dec. 31, 2015 Total liabilities.............$4,085,000.................$2,880,000

Question:

The following data were taken from Alvarado Company's balance sheet:

Dec. 31, 2016..............Dec. 31, 2015

Total liabilities.............$4,085,000.................$2,880,000

Total owner's equity........4,300,000..................3,600,000

a. Compute the ratio of liabilities to owner's equity.

b. Has the creditor's risk increased or decreased from December 31, 2015, to December 31, 2016?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial Accounting

ISBN: 978-1305088436

14th edition

Authors: Carl S. Warren, Jim Reeve, Jonathan Duchac

Question Posted: