Alpha Company provided the following balance sheet for Year 2:

What is the company's plant assets to long-term liabilities ratio?
A)2.5
B)4.5
C)1.7
D)None of these answers is correct.

Question

Alpha Company provided the following balance sheet for Year 2:

What is the company's plant assets to long-term liabilities ratio?
A)2.5 
B)4.5 
C)1.7 
D)None of these answers is correct.

Quizplus · Accepted Answer

Plant assets to long-term liabilities ratio = Plant assets ÷ Long-term liabilities
Plant assets to long-term liabilities ratio = $25,000 ÷ $10,000 = 2.5

Alpha Company Provided the Following Balance Sheet for Year 2