Given the Following Data A) Compute the Ratio of Liabilities to Stockholders' Equity for

question 54

Essay

Given the following data: $\begin{array}{lrc}&\text { Dec. } 31 \text {, Year } 2&\text { Dec. } 31 \text {, Year } 1\\\text { Total liabilities } & \$ 128,250 & \$ 120,000 \text { Total stockholders' } \\\text { equity } & 95,000 & 80,000\end{array}$ a) Compute the ratio of liabilities to stockholders' equity for each year.
b) Has the creditors' risk increased or decreased from December 31, Year 1, to December 31, Year 2?

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