Given the Following Data

question 165

Essay

Given the following data:
Dec. 31, Year 2 Dec. 31, Year 1
Total liabilities $128,250 $120,000
Total stockholders' equity 95,000 80,000
(a) Compute the ratio of liabilities to stockholders' equity for each year. Round your answer to two decimal places.
(b) Has the creditors' risk increased or decreased from December 31, Year 1, to December 31, Year 2?

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Definitions:

Memory Chunk

A cognitive strategy where individual pieces of information are grouped together into larger units, making them easier to remember.

Retrieval Cue

Stimuli or prompts that aid the recall of information stored in memory.

Chunk

In psychology, a unit of information organized in memory, often used to enhance recall through techniques like chunking.

Rehearsal

The practice of repeatedly going over material in one's mind or through behaviors, to strengthen memory or skill.