You are provided with the following information from the December 31, 2016 to 2018 balance sheets of
Question:
Required:
a. Calculate the debt-to-equity ratio for each year.
b. Describe how the ratio has changed over the three years.
c. Interpret why the change in the ratio took place. What changes in the accounts caused the ratio to change as it did?
d. Explain what the change in the ratio means to Peguisshareholders.
Transcribed Image Text:
Peguis Inc Extracts from Balance Sheets On December 31 Current liabilities Non-current liabilities Common shares Retained earnings 2018 $259,875 1,656,000 500,000 1,449,000 247,500 1,380,000 500,000 1,050,000 2016 225,000 1,150,000 500,000 750,000
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a DebttoEquity Ratio 2018 259875 1656000500000 1449000 098 2017 247500 1380000500000 1050000 105 201...View the full answer
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