Excerpts from TPX Company's December 31,2018 and 2017,financial Statements Are

question 120

Multiple Choice

Excerpts from TPX Company's December 31,2018 and 2017,financial statements are presented below: TPX Company's 2018 debt to equity ratio is:
$$\begin{array} { | l | r | r | } \hline & \mathbf { 2 0 1 8 } & \mathbf { 2 0 1 7 } \\\hline \text { Accounts receivable } & \$ 80,000 & \$ 72,000 \\\hline \text { Inventory } & 84,000 & 70,000 \\\hline \text { Net sales } & 400,000 & 372,000 \\\hline \text { Cost of goods sold } & 254,000 & 216,000 \\\hline \text { Total assets } & 850,000 & 810,000 \\\hline \text { Total stockholders' equity } & 500,000 & 450,000 \\\hline \text { Net income } & 75,000 & 56,000 \\\hline\end{array}$$

• A)50.0%.
• B)60.0%.
• C)70.0%.

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Definitions:

Lease

A contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset for a specified period of time.

Financial Lease

A lease agreement where the lessee assumes some of the risks and benefits of ownership.

Sale and Leaseback

A financial transaction where an entity sells an asset and then leases it back from the buyer, typically to free up capital while retaining asset use.

Lessor

The owner of an asset that leases it to another party, known as the lessee, in exchange for periodic rental payments.