Fixed assets (net) $1,800,000
Long-term liabilities 600,000
Total liabilities 900,000
Total stockholders’ equity 750,000
Determine the company’s (a) ratio of fixed assets to long term liabilities and (b) ratio of liabilities to stockholders’ equity.
Answer:
a. Ratio of Fixed Assets to Long-Term Liabilities
Ratio of Fixed Assets to Long-Term Liabilities
Ratio of Fixed Assets to Long-Term Liabilities
b. Ratio of Liabilities to Stockholders’ Equity
Ratio of Liabilities to Stockholders’ Equity
Ratio of Liabilities to Stockholders’ Equity
=
= $1,800,000 ÷ $600,000
= 3.0
= Total Liabilities
Total Stockholders’ Equity
= $900,000 ÷ $750,000
= 1.2