The 2008 financial statements for Carmela's Catering are as follows: The firm has 100,000 shares of common stock outstanding with a market value of $8 a share.
-Refer to the information above. Calculate the liabilities-to-equity ratio, based on book values, for the firm. Round your answer to the nearest tenth of a percent.

Question

The 2008 financial statements for Carmela's Catering are as follows:   The firm has 100,000 shares of common stock outstanding with a market value of $8 a share.
-Refer to the information above. Calculate the liabilities-to-equity ratio, based on book values, for the firm. Round your answer to the nearest tenth of a percent.

Quizplus · Accepted Answer

Liabilities-to-equity ratio = Liabilities / Equity = $1,000,000 / $1,485,000 = 0.673 = 67.3%

The 2008 Financial Statements for Carmela's Catering Are as Follows