Given the Following Data:Dec

question 155

Essay

Given the following data:Dec. 31,Year 2 Dec. 31,Year 1Total liabilities $128,250 $120,000Total owner's equity 95,000 80,000
(a) Compute the ratio of liabilities to owner's 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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Definitions:

Pumps

Mechanical devices used to move fluids (liquids or gases) from one place to another, often by creating a vacuum or pressure difference.

Crop

A crop is a plant or plant product that can be grown and harvested extensively for profit or subsistence.

Diagram

A basic illustration that depicts the look, framework, or function of an object in a diagrammatic form.

Least Efficient

Pertaining to the lowest level of effectiveness or productivity in terms of energy, cost, or time.