The following data were taken from Harrison Company's balance sheet:
$\begin{array}{lcc}
& \text { Dec. 31,2012 } & \text { Dec. 31, 2011 } \
\text { Total liabilities} & \$ 150,000 & \$ 105,000 \
\text { Total stockholders' equity } & 75,000 & 60,000
\end{array}$
a.Compute the ratio of liabilities to stockholders' equity.
b.Has the creditors' risk increased or decreased from December 31,2011,to December 31,2012?

Question

The following data were taken from Harrison Company's balance sheet:
$\begin{array}{lcc} 
& \text { Dec. 31,2012 } & \text { Dec. 31, 2011 } \
\text { Total liabilities} & \$ 150,000 & \$ 105,000 \
\text { Total  stockholders' equity } & 75,000 & 60,000
\end{array}$
a.Compute the ratio of liabilities to stockholders' equity.
b.Has the creditors' risk increased or decreased from December 31,2011,to December 31,2012?

Quizplus · Accepted Answer

The Answer of The following data were taken from Harrison Company's balance sheet:
$\begin{array}{lcc} 
& \text { Dec. 31,2012 } & \text { Dec. 31, 2011 } \
\text { Total liabilities} & \$ 150,000 & \$ 105,000 \
\text { Total  stockholders' equity } & 75,000 & 60,000
\end{array}$
a.Compute the ratio of liabilities to stockholders' equity.
b.Has the creditors' risk increased or decreased from December 31,2011,to December 31,2012?

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