Kids R Kids Company
Selected data from the comparative financial statements are provided below:

-Refer to King Cotton Company. Which one of the liabilities shown in the balance sheets is used in the calculation of the debt-to-equity ratio? If we can assume that the stockholders' equity total remained relatively constant for the two years, how would the ratio change (increase/decrease) from 2019 to 2020? What would this say about the company's financial position?

Question

Kids R Kids Company
Selected data from the comparative financial statements are provided below:
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-Refer to King Cotton Company. Which one of the liabilities shown in the balance sheets is used in the calculation of the debt-to-equity ratio? If we can assume that the stockholders' equity total remained relatively constant for the two years, how would the ratio change (increase/decrease) from 2019 to 2020? What would this say about the company's financial position?

Quizplus · Accepted Answer

The Answer of Kids R Kids Company
Selected data from the comparative financial statements are provided below:
  ​
  
​
 
-Refer to King Cotton Company. Which one of the liabilities shown in the balance sheets is used in the calculation of the debt-to-equity ratio? If we can assume that the stockholders' equity total remained relatively constant for the two years, how would the ratio change (increase/decrease) from 2019 to 2020? What would this say about the company's financial position?