The following data were taken from Miller Company's balance sheet:

Dec. 31, Year 2 Dec. 31, Year 1
Total liabilities $150,000 $105,000
Total stockholders' equity 75,000 60,000

(a) Compute the ratio of liabilities to stockholders' equity. Round your answer to one decimal place.
(b) Has the creditors' risk increased or decreased from December 31, Year 1, to December 31, Year 2?

Question

The following data were taken from Miller Company's balance sheet:
​
Dec. 31, Year 2 Dec. 31, Year 1
Total liabilities $150,000 $105,000
Total stockholders' equity 75,000 60,000
​
(a) Compute the ratio of liabilities to stockholders' equity. Round your answer to one decimal place.
(b) Has the creditors' risk increased or decreased from December 31, Year 1, to December 31, Year 2?

Quizplus · Accepted Answer

The Answer of The following data were taken from Miller Company's balance sheet:
​
Dec. 31, Year 2 Dec. 31, Year 1
Total liabilities $150,000 $105,000
Total stockholders' equity 75,000 60,000
​
(a) Compute the ratio of liabilities to stockholders' equity. Round your answer to one decimal place.
(b) Has the creditors' risk increased or decreased from December 31, Year 1, to December 31, Year 2?

The Following Data Were Taken from Miller Company's Balance Sheet