The balance sheets for Crosby Inc. and Gretzky Company reflect the following. Crosby Inc Gretzky...
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The balance sheets for Crosby Inc. and Gretzky Company reflect the following. Crosby Inc Gretzky Inc. Current liabilities $ 18,000 $ 18,000 Long-term liabilities 15,000 138,000 Stockholders' equity Common stock, $5 par 102,000 27,600 6% Preferred stock, $10 par, cumulative 30,000 12,000 Retained earnings 36,000 18,000 Total liabilities and stockholders' equity $ 201,000 $213,600 Net income, included in above retained earnings amount $20,000 $12,000 Common stockholders' equity, prior year 135,000 54,000 Compute the following ratios, entering each answer rounded to two digits after the decimal; for example, enter 1.42 for 1.424, or 1.43 for 1.425. 1 Crosby Inc. Gretzky Inc. a. Compute the total liabilities-to-equity ratio. b. Compute the return on equity ratio. c. Compute book value per share of common stock. d. Interpret the results. When comparing Crosby Inc. to Gretzky Inc., Crosby Inc. has by the total liabilities-to-equity ratio Indicated by the return on equity ratio Indicated by the book value per share These results indicate that Crosby, as compared to Gretzky, has Profitability Solvency
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