Long-Term Solvency Analysis The following information was taken from Station Com

Question

Long-Term Solvency Analysis The following information was taken from Station Company's balance sheet: Fixed assets (net) Long-term liabilities Total liabilities Total stockholders' equity Determine the company's (a) ratio of fixed assets to long-term liabilities and (b) ratio of liabilities to stockholders' equity. If required, round your answers to one decimal place. a. Ratio of fixed assets to long-term liabilities b. Ratio of liabilities to stockholders' equity $944,000 472,000 826,000 1,652,000

Explanation / Answer

a. Ratio of fixed assets to long-term liabilities = Fixed assets / Long-term liabilities = $944,000 / $472,000 = 2

b. Ratio of liabilities to stockholders' equity = Total liabilities / Total stockholders' equity = $826,000 / $1,652,000 = 0.5

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