Compute the ratio of liabilities to owner equity

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Problem - Ratio of liabilities to owner's equity - The following data were taken from White Company's balance sheet:

 

Dec. 31, 2012

 Dec. 31, 2011

Total liabilities

$375,000

 $287,500

Total owner's equity

 300,000 

250,000

Required -

a. Compute the ratio of liabilities to owner's equity.

b. Has the creditor's risk increased or decreased from December 31, 2011 to December 31, 2012?

Reference no: EM132874771

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