The Following Data Were Taken from Harrison Company's Balance Sheet

question 2

Essay

The following data were taken from Harrison Company's balance sheet:
$\begin{array}{lcc} & \text { Dec. 31,2012 } & \text { Dec. 31, 2011 } \\\text { Total liabilities} & \$ 150,000 & \$ 105,000 \\\text { Total stockholders' equity } & 75,000 & 60,000\end{array}$
a.Compute the ratio of liabilities to stockholders' equity.
b.Has the creditors' risk increased or decreased from December 31,2011,to December 31,2012?

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