Alpha Company provided the following balance sheet for Year 2: What is the company's plant assets to long-term liabilities ratio?
A) 2.5
B) 4.5
C) 1.7
D) None of these answers is correct.

Question

Alpha Company provided the following balance sheet for Year 2:  What is the company's plant assets to long-term liabilities ratio?
A) 2.5 
B) 4.5 
C) 1.7 
D) None of these answers is correct.

Quizplus · Accepted Answer

Plant assets to long-term liabilities ratio = Plant assets ÷ Long-term liabilities
Plant assets to long-term liabilities ratio = $25,000 ÷ $10,000 = 2.5

Alpha Company Provided the Following Balance Sheet for Year 2