Calculate Wiper\'s debt ratio and debt/equity ratio at December 31, 2017 and 201

Question

Calculate Wiper's debt ratio and debt/equity ratio at December 31, 2017 and 2016. (Round "Debt ratio" to 1 decimal place and "Debt/equity ratio" to the nearest whole percent.)

WIPER, INC. Condensed Balance Sheets December 31, 2017, 2016, 2015 (in millions) 2017 2016 2015 Current assets $ 764 $ 981 $ 843 Other assets 2,424 1,931 1,730 Total assets $ 3,188 $ 2,912 $ 2,573 Current liabilities $ 588 $ 841 $ 734 Long-term liabilities 1,582 1,034 910 Stockholders’ equity 1,018 1,037 929 Total liabilities and stockholders' equity $ 3,188 $ 2,912 $ 2,573

Explanation / Answer

Calculation of debt ratio & debt equity ratio

Formula 2016 2017 Debt Ratio=Total Debt/Total Asset 1034/2912=0.4 1582/3188=0.5 Debt-to-Equity Ratio=Total Liabilities/Shareholders' Equity (841+1034)/1037=2 (588+1582)/1018=2

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