Busch Company's balance sheet shows total liabilities of $510,900, total equity of $126,000, and total assets of

Question:

Busch Company's balance sheet shows total liabilities of $510,900, total equity of $126,000, and total assets of $636,900.

Required:

1. Calculate the debt ratio.

2. Calculate the debt-to-equity ratio.

3. Based on the ratios calculated in Requirements 1 and 2,comment on the riskiness of Busch's financing decisions.

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...