Company a Has Liabilities of $6,773,000 and Stockholders' Equity of $3,647,000

question 48

Essay

Company A has liabilities of $6,773,000 and stockholders' equity of $3,647,000 at the end of the current year,and sales revenue of $9,800,000 and net income of $899,080 for the year.Company B has assets of $1,680,000 and stockholders' equity of $978,750 at the end of the current year,and sales revenue of $1,950,000 and net income of $351,000 for the year.
A.Calculate the debt-to-assets and net profit margin ratios for each company.
B.Which company has greater financing risk?
C.Which company generates more profit per dollar of sales?

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Definitions:

Organizational Financial Performance

Refers to how well an organization is performing in terms of generating revenue, profits, return on investment, and overall financial health.

Organizational Commitment

The psychological attachment an employee has towards their organization, influencing their willingness to continue working there.

Conscientiousness

A personality trait characterized by organization, dependability, and a strong sense of duty or responsibility.

Big Five

A psychological theory describing five core dimensions of human personality: Openness, Conscientiousness, Extraversion, Agreeableness, and Neuroticism.