At the end of last year,Cessa Company had total assets in the amount of $4,000,000 and total liabilities in the amount of $3,000,000.The company sold stock to new shareholders at the beginning of the current year for $1,000,000.As a direct result of this transaction,the:

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The debt-to-assets ratio is calculated by dividing total liabilities by total assets. Since the company sold stock to new shareholders, it did not incur any new debt. Therefore, the total liabilities remain the same while the total assets increased to $5,000,000 ($4,000,000 + $1,000,000). This results in a lower debt-to-assets ratio, indicating a lower risk of default for the company.

At the End of Last Year,Cessa Company Had Total Assets