Problem - Ratio of Liabilities to Stockholders Equity

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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, H.J. Heinz Company and The Hershey Company, is as follows (in thousands of dollars):

 

H.J. Heinz

Hershey

Net property, plant, and equipment

$1,978,302

$1,458,949

Current liabilities

2,062,8846

1,270,212

Long-term debt

5,076,186

1,505,954

Other long-term liabilities

1,305,214

540,354

Stockholders' equity

1,219,938

318,199

Required -

a. Determine the ratio of liabilities to stockholders' equity for both companies. Round to one decimal place.

b. Determine the ratio of fixed assets to long-term liabilities for both companies. Round to one decimal place.

c. Interpret the ratio differences between the two companies.

Reference no: EM132684330

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