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

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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.
Required:
Part a.P1P1_0.95Calculate the debt-to-assets ratio for each company.P1P1_E
Part b.Identify the company that has greater financing risk and explain why.


Definitions:

Stressors

External pressures or events that cause stress, which can be physical, psychological, or emotional in nature, impacting individual well-being and health.

Type B Personality

A character type marked by a calm, tolerant, and laid-back attitude.

Pessimistic Outlook

A tendency to see the worst aspect of things or believe that the worst will happen; a lack of hope or confidence in the future.

Stressor

A chemical or biological agent, environmental condition, external stimulus, or an event that causes stress to an organism.

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