Debt to Equity Ratio
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Appendix A
Figure 1
Summary Period End July 31, 2010
Appendix B
Figure 2
Statement of Operations
Appendix C
Figure 3
Balance Sheet
Appendix D
Figure 4
Statement of Cash Flows
Appendix A
Figure 1
Summary Period End June 30, 2010
Appendix B
Figure 2
Statement of Operations June 30, 2010
Appendix C
Figure 3
Balance Sheet
Appendix D
Figure 4
Statement of Cash Flows
Appendix E
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Solution Summary
Using financial statements, the solution explains where to locate the figures necessary to figure the debt to equity ratio. The caluculation is demonstrated. Explanation is included to explain how investors and creditors use the ratio and why it is important
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Total debt to equity ratio is Total liabilities divided by stockholders equity. These numbers are found on the Balance Sheet- Figure 3 Appendix C
Stockholders Equity = Assets + Liabilities Found on the last line. Therefore TL/E is 1385759/2328742=.595 or rounded to 60%. This means 60% of the companies worth is tied up in debt. This could affect their ability to ...
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