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Question & Answer: [The following Information applies to the questions displayed below.] The balance sheet for Alto…..

The following Information applles to the questions displayed below.j The balance sheet for Altold Co. Is shown below ALTOID CO Balance Sheet At December 31, 2016 Assets Cash Short-term Investments Accounts recelvable (net) Inventories Property, plant, and equipment (net) $ 210 500 600 750 1,210 $ 3.270 Total assets Liabilties and shareholders equity Current liabilities Long-term liabilities Pald-In capital Retalned earnings $ 750 900 450 1.170 $ 3.270 Total llablities and shareholders equity Selected 2016 Income statement Information for Altold Co. Includes Net Sales Operating expenses Income before Interest and taxes Interest expense Income tax expense $ 8,300 7,340 960 60 270 $ 630 Net Income Required Compute the following financial statement ratios for 2016: value 0.00 points Altoid Co.s debt to equity ratio. (Round your answer to two decimal places.) Debt to equity ratio

[The following Information applies to the questions displayed below.] The balance sheet for Altoid Co. Is shown below. Selected 2016 Income statement Information for Altoid Co. Includes: Required: Compute the following financial statement ratios for 2016: Altoid Co.’s debt to equity ratio. Debt to equity ratio

Expert Answer

 

Debt to Equity Ratio = Total Liabilities / Total Shareholder’s Equity
Total Liabilities = $750 (Current Liabilities) + $900 (Long term liabilities)
Total Liabilities = $1,650
Total Shareholders’ Equity = $450 (Paid in Capital) + $1,170 (retained Earnings)
Total Shareholders’ Equity = $1,620
Debt to Equity Ratio = $1,650 / $1,620
Debt to Equity Ratio = 1.018519 or say 1.02 (Approx.)
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