interstate delivery v2cengagenowcom g and learning resource

v2.cengagenow.com g and learning resource from Cengage Learning The following data were taken from Alvar eBook Show Me How Calculator Ratio of Liabilities to Owner\'s Equity The following data were taken from Alvarado Company\'s balance sheet: Total liabilities Total owner\'s equity a. Compute the ratio of liabilities to owner\'s equity. Round your answers to two decimals. Dec. 31, 2019 $4,085,000 4,300,000 Dec. 31, 2018 $2,880,000 3,600,000 Ratio of Liabilities to Owner\'s Equity Dec. 31, 2019 Dec. 31, 2018 b. Has the creditor\'s risk increased or decreased from December 31, 2018, to December 31, 2019? Check hy Work 3 more Check My Work uses remaining All work saved.

Solution

Alvarado Company l) Liabilty to Owner\'s Equity Ratio=Tota Liabilities/Total Equity Dec 31,2019 Dec 31,2018 Total Liabilities $      4,085,000.00 $            2,880,000.00 Total Equity $      4,300,000.00 $            3,600,000.00 Debt Equity Ratio= $                       0.95 $                             0.80 The Creditor\'s risk is increased from December 31st,2018 to December 31st 2019   because the company is financed by creditors rather than uses their own source.