Concept explainers
1.
Concept Introduction:
Accounting has formula that represents assets is equal to the liabilities plus owner’s equity. Each year owner’s equity is calculated by after reducing and adding the profit or loss of the year. Net Income or profit is calculated by reducing expenses from revenues.
Debt ratio is calculated from debt dividing by the total assets.
To Calculate: Debt ratio of current year and of prior year of company A.
2.
Concept Introduction:
Accounting has a formula that represents assets is equal to the liabilities plus owner’s equity. Each year owner’s equity is calculated by after reducing and adding the profit or loss of the year. Net Income or profit is calculated by reducing expenses from revenues.
Debt ratio is calculated from debt dividing by the total assets.
To Calculate: Trend of Financial Leverage.
3.
Concept Introduction:
Accounting has a formula that represents assets is equal to the liabilities plus owner’s equity. Each year owner’s equity is calculated by after reducing and adding the profit or loss of the year. Net Income or profit is calculated by reducing expenses from revenues.
Debt ratio is calculated from debt dividing by the total assets.
To Calculate: Comparison of company A with company B and company C.
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Loose Leaf for Financial Accounting: Information for Decisions
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