Deacon Corporation has provided the following financial data from its balance sheet and income statement: The company's equity multiplier at the end of Year 2 is closest to:

Question

Deacon Corporation has provided the following financial data from its balance sheet and income statement:  The company's equity multiplier at the end of Year 2 is closest to:

Quizplus · Accepted Answer

Equity multiplier = Average total assets* ÷ Average stockholders' equity*
= $1,179,000 ÷ $716,000 = 1.65 (rounded)
*Average total assets = ($1,198,000 + $1,160,000)÷ 2 = $1,179,000
**Average stockholders' equity = ($732,000 + $700,000)÷ 2 = $716,000

Deacon Corporation Has Provided the Following Financial Data from Its