Problem
Ratio of Liabilities to Stockholders' Equity and Ratio of Fixed Assets to Long-Term Liabilities
Recent balance sheet information for two companies in the food industry, Santa Fe Company and Madrid Company, is as follows (in thousands of dollars):
|
Santa Fe
|
Madrid
|
|
Net property, plant, and equipment
|
$331,870
|
|
$741,420
|
|
|
Current liabilities
|
245,611
|
|
864,016
|
|
|
Long-term debt
|
350,834
|
|
593,136
|
|
|
Other long-term liabilities
|
123,266
|
|
230,664
|
|
|
Stockholders' equity
|
153,130
|
|
324,580
|
|
a. Determine the ratio of liabilities to stockholders' equity for both companies.
b. Determine the ratio of fixed assets to long-term liabilities for both companies.