Question

In: Accounting

Determine the company’s (a) ratio of fixed assets to long-term liabilities and (b) ratio of liabilities to stockholders’ equity. Round to one decimal place.

The following information was taken from Sigmund Company’s balance sheet:

Fixed assets (net) $1,050,000

Long-term liabilities 750,000

Total liabilities 850,000

Total stockholders’ equity 500,000

Determine the company’s (a) ratio of fixed assets to long-term liabilities and (b) ratio of liabilities to stockholders’ equity. Round to one decimal place.

 

Solutions

Expert Solution

Financial ratios : Financial ratios are indicators used to assess a company's liquidity, capabilities, profitability, and overall performance.

(a) Formula for calculating Ratio of fixed assets to long term liabilites 

Ratio of fixed assets to long term liabilities = Fixed assets / Long term liabilities

=$1,050,000 / $750,000

=1.4

(b)Calculation of number of Day's sales in inventory

Ratio of liabilities to stockholder's equity = Total liabilities / Stockholder's Equity

=$850,000 / $500,000

=1.7

 

(a)Therefore , the ratio of fixed assets to long term liabilities is 1.4

(b)Therefore, the number of day's sales in inventory is 1.7

 

balaji rao answered 2 years ago
Next > < Previous

Related Solutions

Determine the company’s (a) ratio of fixed assets to long-term liabilities and (b) ratio of liabilities to total stockholders’ equity. Round to one decimal place.
The following information was taken from Acme Company’s balance sheet:Fixed assets (net) $1,400,000Long-term liabilities 400,000Total liabilities 560,000Total stockholders’ equity 1,400,000Determine the company’s (a) ratio of fixed assets to long-term liabilities and (b) ratio of liabilities to total stockholders’ equity. Round to one decimal place.
Ratio of Liabilities to Stockholders' Equity and Ratio of Fixed Assets to Long-Term Liabilities Recent balance...
Ratio of Liabilities to Stockholders' Equity and Ratio of Fixed Assets to Long-Term Liabilities Recent balance sheet information for two companies in the food industry, Santa Fe Company and Madrid Company, is as follows (in thousands): Santa Fe Madrid Net property, plant, and equipment $634,720 $816,800 Current liabilities 257,307 599,208 Long-term debt 587,116 588,096 Other long-term liabilities 206,284 228,704 Stockholders' equity 256,270 321,820 a. Determine the ratio of liabilities to stockholders' equity for both companies. Round to one decimal place....
Ratio of Liabilities to Stockholders' Equity and Ratio of Fixed Assets to Long-Term Liabilities Recent balance...
Ratio of Liabilities to Stockholders' Equity and Ratio of Fixed Assets to Long-Term Liabilities Recent balance sheet information for two companies in the food industry, Santa Fe Company and Madrid Company, is as follows (in thousands): Santa Fe Madrid Net property, plant, and equipment $743,280 $574,700 Current liabilities 331,320 466,878 Long-term debt 687,534 413,784 Other long-term liabilities 241,566 160,916 Stockholders' equity 300,100 226,430 a. Determine the ratio of liabilities to stockholders' equity for both companies. Round to one decimal place....
Determine (a) the return on stockholders’ equity and (b) the return on common stockholders’ equity. Round percentages to one decimal place.
A company reports the following:Net income $ 375,000Preferred dividends 75,000Average stockholders’ equity 2,500,000Average common stockholders’ equity 1,875,000Determine (a) the return on stockholders’ equity and (b) the return on common stockholders’ equity. Round percentages to one decimal place.
Determine (a) the return on stockholders’ equity and (b) the return on common stockholders’ equity. Round percentages to one decimal place.
A company reports the following:Net income $ 125,000Preferred dividends 5,000Average stockholders’ equity 1,000,000Average common stockholders’ equity 800,000Determine (a) the return on stockholders’ equity and (b) the return on common stockholders’ equity. Round percentages to one decimal place.
Determine (a) the current ratio and (b) the quick ratio. Round to one decimal place.
The following items are reported on a company's balance sheetParticularsAmount$Cash100,000Marketable securities50,000Accounts receivable (net)60,000Inventory70,000Accounts payable140,000Determine (a) the current ratio and (b) Quick ratio.Round to one decimal place 
Determine (a) the current ratio and (b) the quick ratio. Round to one decimal place
The following items are reported on a company’s balance sheet:Cash $300,000Temporary investments 100,000Accounts receivable (net) 200,000Inventory 200,000Accounts payable 400,000Determine (a) the current ratio and (b) the quick ratio. Round to one decimal place
a. Determine the company’s earnings per share on common stock.(b)b. Determine the company’s price-earnings ratio. Round to one decimal place.
A company reports the following:Net income $185,000Preferred dividends $25,000Shares of common stock outstanding 100,000Market price per share of common stock $20a. Determine the company’s earnings per share on common stock.b. Determine the company’s price-earnings ratio. Round to one decimal place. 
a. Determine the company’s earnings per share on common stock. b. Determine the company’s price-earnings ratio. Round to one decimal place.
A company reports the following:Net income $250,000Preferred dividends $15,000Shares of common stock outstanding 20,000Market price per share of common stock $35.25a. Determine the company’s earnings per share on common stock.b. Determine the company’s price-earnings ratio. Round to one decimal place
Determine the asset turnover ratio. Round to one decimal place
A company reports the following:Sales $1,800,000Average total assets 1,125,000Determine the asset turnover ratio. Round to one decimal place.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT