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

question 199

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.

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Definitions:

Regio-

A prefix in chemistry indicating the region or position in a molecule where a reaction occurs, often used to describe the specificity of chemical reactions.

Stereochemical

Relating to the study of the spatial arrangement of atoms in molecules and its impact on the chemical behavior of those molecules.

Regio-

A prefix denoting the specific region or orientation of a molecule where a chemical reaction occurs.

Stereochemical

Pertaining to the spatial arrangement of atoms in molecules and the effect of this arrangement on their chemical behavior and properties.