‪Use the information that follows taken from Camron Company's financial statements for the years ending December 31, 2010 and 2009 to answer problems

-Calculate Camron's debt to equity ratio as of December 31, 2009 and as of December 31, 2010.Also assume that in Camron's industry, the industry average debt to equity ratio is 2.75 as of December 31, 2009 and as of December 31, 2010.
A) Camron's debt to equity ratio improved from 2009 to 2010.
B) Camron's debt to equity ratio was better than average for the industry both years.
C) Camron's debt to equity is worse than average for the industry for both years.
D) Both a and b above, but not c.

Question

‪Use the information that follows taken from Camron Company's financial statements for the years ending December 31, 2010 and 2009 to answer problems 
 
-Calculate Camron's debt to equity ratio as of December 31, 2009 and as of December 31, 2010.Also assume that in Camron's industry, the industry average debt to equity ratio is 2.75 as of December 31, 2009 and as of December 31, 2010.
A) Camron's debt to equity ratio improved from 2009 to 2010. 
B) Camron's debt to equity ratio was better than average for the industry both years. 
C) Camron's debt to equity is worse than average for the industry for both years. 
D) Both a and b above, but not c.

Quizplus · Accepted Answer

Camron has the following debt to equity ratios on December 31:
2010 ($85+180) / (150-65) = 3.12
2009 ($100+200) / (150-50) = 3.0
Unlike the other ratios we study in this course, the lower the debt to equity ratio, the better.Hence, the ratio worsened from 2009 to 2010 and is worse than the industry average.

‪Use the Information That Follows Taken from Camron Company's Financial