Question: This is an excerpt from Blue Designs 2017 annual report: Millions 2017 2016 Debit $50,000 $48,000 Equity $34,000 $32,000 Part A - What is the

This is an excerpt from Blue Designs 2017 annual report:

Millions	2017	2016
Debit	$50,000	$48,000
Equity	$34,000	$32,000

Part A - What is the debt-to-equity ration for 2017 and 2016 based on end of year values for debt and equity?

Part B The company had operating leases which totaled $3,200 and $4,000 in 2017 and 2016 (respectively). Assume the leasers were capitalized (included in the total amount of debt reported). What is the recalculated debt-to-equity ratio for 2017 and 2016 without the operating leases? What does capitalizing the leases do to risk perception or Blue Design?

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