Given the Following Data A Compute the Ratio of Liabilities to Stockholders' Equity for Dec

question 122

Essay

Given the following data:
$\begin{array}{lcl}&\text { Dec. } 31,2014&\text { Dec. } 31,2013\\\text { Total liabilities } & \$ 128,250 & \$ 120,000 \\\text { Total stockholders' equity } & 95,000 & 80,000\end{array}$

a. Compute the ratio of liabilities to stockholders' equity for each year.
b. Has the creditors' risk increased or decreased from December 31, 2013, to December 31, 2014?

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